Sell My House Closing Process and Legal Documents

Question 1

What is 'closing' in a real estate transaction?

Accepted Answer

The final step where ownership legally transfers from seller to buyer and all funds are exchanged

Answer

Closing is the legal completion of the sale where the buyer pays for the home, the seller receives proceeds, and the deed is transferred, officially making the buyer the new owner.

Question 2

What is a 'closing disclosure' (CD)?

Accepted Answer

A federally required document detailing all final loan terms, fees, and cash amounts due at closing

Answer

The Closing Disclosure is a five-page CFPB-mandated document that lenders must provide to borrowers at least three business days before closing, detailing every cost and financial element of the loan.

Question 3

What is 'title insurance' and why is it important for home sellers?

Accepted Answer

Insurance that protects against losses from defects in the property's title history, such as liens or ownership disputes

Answer

Title insurance protects buyers and lenders from financial loss due to title defects — liens, back taxes, or competing ownership claims — that may surface after the sale closes.

Question 4

What are 'closing costs' that a seller typically pays?

Accepted Answer

Agent commissions, title fees, transfer taxes, prorated property taxes, and any agreed seller concessions

Answer

Seller closing costs typically include real estate commissions, title and escrow fees, transfer taxes, prorated property taxes, and any credits or concessions agreed to in the contract.

Question 5

What is a 'purchase and sale agreement' (PSA)?

Accepted Answer

The legally binding contract between buyer and seller outlining all terms of the transaction

Answer

The Purchase and Sale Agreement is the primary contract in a real estate transaction, specifying the price, contingencies, closing date, and all other agreed-upon terms.

Sell My House Practice Test

Sell My House Practice Test

Sell My House Closing Process and Legal Documents