At closing, a seller signs the deed and a stack of settlement documents in front of a notary, the closing agent uses the sale price to pay off the mortgage and every other charge tied to the property, and the remaining balance is sent to the seller by wire or check. That is essentially what happens at closing for sellers: a signing appointment that usually runs under an hour, followed by disbursement of funds and recording of the deed. What you actually walk away with depends on your loan payoff, commissions, taxes, and a handful of smaller fees.
What You Bring and What You Sign
Bring a valid government-issued photo ID. The notary has to verify your identity before you sign anything, so a driver’s license or passport is essential. If the home is titled in a trust or a business entity, bring the trust agreement or articles of incorporation and proof that you have authority to sign for that entity.
You’ll also provide your Social Security number or taxpayer ID. Federal law requires the closing agent to collect it and report the sale to the IRS on Form 1099-S with the gross proceeds.1eCFR. 26 CFR 1.6045-4 – Information Reporting on Real Estate Transactions There’s one common exception: if the home is your principal residence, the full gain is excludable under Section 121, and the sale price is $250,000 or less ($500,000 or less for married couples filing jointly), the closing agent may not need to file a 1099-S at all, provided you give written confirmation that you qualify.2Office of the Law Revision Counsel. 26 USC 6045 – Returns of Brokers
If the property is in a homeowners association, you’ll typically need an estoppel or resale certificate from the HOA showing your current balance, unpaid dues or special assessments, and any open violations. The closing agent uses it to make sure no association debts follow you after the sale.
The signing itself usually takes place at a title company office, an attorney’s office, or online. A closing agent walks you through the documents in order and a notary witnesses your signatures. The central document is the deed transferring ownership to the buyer. You’ll also sign tax affidavits, lien releases, and the settlement statement confirming you agree to the financial breakdown.
The settlement statement itemizes every charge and credit in the transaction. If the buyer has a mortgage, the lender also produces a Closing Disclosure under federal rules, and you may receive a copy or a seller-side version.3Consumer Financial Protection Bureau. TILA-RESPA Integrated Disclosure – Guide to the Loan Estimate and Closing Disclosure Forms Many closings also use an ALTA settlement statement, which breaks down each party’s debits and credits in a standardized format. Read it before the appointment. Small errors in prorated taxes or the mortgage payoff figure can move your net by hundreds of dollars.
Can’t attend in person? Most jurisdictions let you grant a power of attorney to someone who can sign for you, but the title company and the buyer’s lender have to approve the POA document in advance. Arrange it early.
Remote Online Notarization
A growing number of sellers close without visiting an office. Remote online notarization lets you sign over a live audio-video connection with a commissioned notary. As of early 2025, 45 states and the District of Columbia have enacted permanent RON laws.4NASS. Remote Electronic Notarization The platform verifies your identity through knowledge-based questions and analysis of your government ID before you sign electronically, and the notary’s digital seal is attached in a way that shows whether the documents were altered afterward.
What Comes Out of Your Sale Price
The closing agent subtracts every obligation and fee from the gross sale price before sending you the balance. Sellers typically pay total closing costs in the range of 8 to 10 percent of the sale price, though the actual figure depends heavily on your mortgage balance, your commission agreements, and your location.
Mortgage Payoff
If you still owe on a mortgage, the closing agent wires the payoff directly to your lender from the sale proceeds. That amount covers the remaining principal plus interest accrued through the closing date. Once the funds arrive, the lender releases its lien. A home equity loan or line of credit gets paid off the same way.
Real Estate Commissions
Agent commissions have historically been the largest single closing cost for sellers, traditionally in the 5 to 6 percent range and split between the two agents. A settlement with the National Association of Realtors took effect in August 2024 and changed the default. Sellers are no longer automatically responsible for paying the buyer’s agent. Buyer-side commissions are negotiated separately between the buyer and their agent, and listing agents can no longer advertise a specific buyer-agent commission on the MLS. You still negotiate your own agent’s commission; whether you also contribute to the buyer’s agent fee is now a point of negotiation rather than an industry default.
Transfer Taxes and Recording Fees
Most states charge a transfer or excise tax when real property changes hands. Rates run from as low as 0.01 percent to more than 2 percent of the sale price in higher-tax jurisdictions, and around a dozen states charge none at all. Your contract and local custom determine whether the seller, buyer, or both split the cost. The closing agent also pays a modest flat recording fee to the county to file the new deed.
Prorated Taxes and Prepaid Items
Property taxes are prorated so you pay through the closing date and the buyer picks up the rest. If you’ve already paid taxes for a period extending past closing, you get a credit. If taxes are due but unpaid, the closing agent withholds your share from the proceeds. HOA dues are adjusted the same way. Utilities generally are not prorated at closing; schedule a final meter reading, pay your last bill, and let the buyer set up a new account.
Title Insurance and Miscellaneous Fees
In many markets the seller pays for the buyer’s owner’s title insurance policy, a one-time premium that scales with the sale price and can run from a few hundred to several thousand dollars. Expect additional line items on the settlement statement for escrow fees, courier charges, and notary fees.
When and How You Get Paid
Once every signature is collected and the settlement statement is final, the closing agent disburses funds according to that statement. Lender, agents, taxing authorities, and any other parties owed money are paid first. The remaining balance is your net proceeds.
Wire transfer is the most common method, and the funds typically land in your account within 24 to 48 hours depending on when the wire is sent and the banks involved. Some sellers instead receive a cashier’s check at the table or shortly afterward by mail. If you’re being wired, call the closing agent directly using a number you already have and confirm the wiring instructions by voice. Wire fraud schemes that impersonate closing agents and reroute proceeds have become common.
After You Sign
The closing agent submits the executed deed to the county recorder’s office. Recording creates the public record that ownership has changed, and the county updates its tax and ownership rolls to show the buyer as the new owner. Recording itself can take anywhere from a couple of weeks to several months depending on the county, but legal transfer of ownership typically occurs at closing or upon recording, as specified in your contract and state law.
You’ll hand over all keys, garage door openers, security codes, and appliance manuals to the buyer or the closing agent. Once the deed is recorded and you’ve vacated, your legal responsibility for the home ends.
Capital Gains and the Section 121 Exclusion
Capital gains tax is not deducted at the closing table, but it affects your true net. If you sell for more than your adjusted cost basis, the profit is a capital gain. Federal law lets you exclude up to $250,000 of that gain from income taxes, or up to $500,000 if you’re married filing jointly.5Office of the Law Revision Counsel. 26 USC 121 – Exclusion of Gain From Sale of Principal Residence
To qualify you must meet two tests during the five-year period ending on the sale date. The ownership test requires that you owned the home for at least two of those five years. The use test requires that you lived in it as your primary residence for at least two of those five years, and those months don’t have to be consecutive. For married couples filing jointly, only one spouse needs to satisfy the ownership test, but both must meet the use test.6Internal Revenue Service. Publication 523 – Selling Your Home Your adjusted cost basis is not just what you originally paid; capital improvements you made over the years add to it and can reduce or eliminate your taxable gain, which is why keeping records of that work matters.
FIRPTA Withholding If You’re a Foreign Seller
If you’re a foreign person, not a U.S. citizen or resident alien, the buyer is generally required to withhold 15 percent of the total sale price under the Foreign Investment in Real Property Tax Act and send it to the IRS.7Internal Revenue Service. FIRPTA Withholding The withholding comes out of your proceeds at closing. You file a U.S. tax return afterward to claim a refund of anything withheld beyond your actual tax liability.
Two exceptions matter. FIRPTA withholding does not apply if the buyer will use the property as a personal residence and the sale price is $300,000 or less.7Internal Revenue Service. FIRPTA Withholding And if your actual tax on the gain will be less than 15 percent of the sale price, you can apply for a withholding certificate on IRS Form 8288-B before closing to authorize a lower amount.8Internal Revenue Service. Form 8288-B – Application for Withholding Certificate for Dispositions by Foreign Persons of U.S. Real Property Interests Processing takes time, so start early.
If You Need to Stay After Closing
If your next home isn’t ready, you and the buyer can negotiate a post-closing occupancy agreement, sometimes called a seller leaseback. You remain in the property for a set number of days in exchange for a daily occupancy charge, typically based on the buyer’s daily housing costs: mortgage payment, taxes, insurance, and any association fees. The charge is usually deducted from your proceeds at closing, along with a security deposit the closing agent holds until you vacate and the buyer confirms the home’s condition.
These agreements include a penalty rate if you overstay. The buyer’s lender may cap how long a seller can remain, often at 60 days, so finalize the terms before closing rather than at the last minute.