Once a deal is reached, you and the buyer must agree upon and include a closing date in the purchase and sale agreement. The closing date is the day that you get paid for the property and turn over your keys and deed to the buyer.
When considering the appropriate closing date, it’s important to keep in mind the activities that both parties will need to perform to get ready to close the transaction. For example, the buyer may need to make mortgage arrangements while you may need to find another home or make arrangements to have your belongings moved and/or stored. The closing date must also allow the lawyers to complete their necessary duties such as performing title searches. Closing date time frames can be anything from weeks to months depending on the needs of you and the buyer.
A closing date can either be a fixed date or a scheduled date contingent on a certain activity being performed ( i.e. a closing date could be set for 30 days after a home inspection takes place). The key to setting a closing date is allowing a reasonable amount of time for both parties to get their affairs in order. You may want to consult with your lawyer to get a sense of what needs to be done before finalizing this date. As with other parts of the purchase and sales agreement, the closing date is a clause that can be counter-offered and negotiated.
The closing date is also the date used by lawyers to perform cost adjustments on the property. Adjustments are essentially payments made to you by the buyer for things you already paid for. For example, if you prepaid your taxes, home fuel or utilities, then the buyer would need to pay you for the pro-rated amount that goes beyond your closing date. These costs would typically be outlined in your statement of adjustments.
Once a closing date is set, this is the date that you need to have all your belongings out of the house and have it ready for the new owners to move in. This means that if there are any conditions in the purchase and sales agreement that are your responsibility, you wou ld need to have them resolved before closing. For example, part of the agreement might require you to replace a carpet or repair some items. The closing date would be your deadline to have these issues addressed. The buyer will be performing a walk through on the closing date to ensure the house is in proper condition.