The final stage of the transaction process occurs with the transfer of title from seller to buyer. An escrow professional, a third party, will facilitate the transfer of money and documents (including title and deed) between the buying and selling parties. The escrow company prepares documents, draws up the closing statements, obtains necessary signatures, records documents, and receives and disburses funds.
If either seller or buyer cannot attend, he or she can sign papers in advance, and/or grant power of attorney to a representative.
The proceeds from the sale are released directly to you, the seller, via wire, automatic deposit, or check. Funds can also be deposited into an escrow account opening for the purchase of your next home.
The Exchange of Property and Funds
- Once you have sold your home, make sure to keep your closing and settlement papers organized in a file.
- Be sure to include receipts for any home improvements you made while you owned the house in the event that you have to pay capital gains tax.
- Also, know your rights as a home seller, including one of the benefits of buying a home – the tax breaks you receive from the government.
- Contact the Internal Revenue Service directly at 800-TAX-FORM and ask for the following free publications, which are designed to assist you in the sale of your home:
521 Moving Expenses
523 Selling Your Home
527 Residential Rental Property
541 Partnerships
551 Basis of Assets
555 Community Property
561 Determining the Value of Donated Property
908 Bankruptcy Tax Guide
936 Home Mortgage Interest Deduction
Releasing the Property to the New Owners
Once the closing papers have been completed and the deed recorded with the county, the buyer can take legal ownership of the home. The possession date for the new owner is determined by the term of the sales contract. Prior to possession, you should start contacting the phone, electric, natural gas, garbage, and other utility companies to close any accounts relating to the home under your name.