Disclosures and closing are where most of the legal risk in a home sale lives. The rules differ by state, so treat this page as a map of the general process, then check your state’s requirements and talk to a real-estate attorney.
Seller Disclosures
Most states require sellers to tell buyers about known material defects, and many use a standard disclosure form covering things like the roof, plumbing, electrical systems, water intrusion, pests and past repairs. Some states rely more on buyers’ own inspections, but hiding a known problem can lead to legal trouble almost anywhere. When in doubt, disclose.
Lead-Based Paint (Homes Built Before 1978)
Federal law requires sellers of most housing built before 1978 to disclose any known lead-based paint or lead hazards, provide any reports they have, give buyers the federal lead pamphlet, and give buyers an opportunity to test for lead before they are bound by the contract. EPA’s lead disclosure rule explains the requirements.
From Accepted Offer to Closing
- Earnest money: the buyer’s deposit is held by a neutral party, such as a title or escrow company or an attorney.
- Inspection: the buyer inspects, then may ask for repairs, credits or a price change, or walk away if the contract allows.
- Appraisal: if the buyer is financing, the lender orders an appraisal. A low value may lead to renegotiation.
- Title search: the title company or attorney checks for liens and ownership issues and arranges title insurance.
- Loan approval: the buyer’s lender finalizes the mortgage.
- Final walk-through: the buyer checks the home shortly before closing.
Closing Day
Who runs the closing depends on where you live: in some states an attorney handles it, in others a title or escrow company does. At closing, the seller typically signs the deed and related documents; the closing agent pays off your mortgage and other liens from the proceeds, pays agreed costs, and sends you the balance. You will receive a settlement statement showing every amount; read it before you sign. The buyer’s side of the paperwork is explained in the CFPB’s home buying guide.
After Closing
- Keep copies of the settlement statement, deed and all disclosures.
- Cancel or transfer utilities and homeowner’s insurance on the agreed date.
- Read IRS Publication 523, Selling Your Home and talk to a tax professional about how the sale affects your taxes.
- Update your address with the post office, banks and government agencies.
Protect the Money
Closing is when large sums move by wire, and criminals know it. Never act on emailed payment instructions without calling your closing agent at a number you have verified independently. If you suspect fraud, contact your bank immediately and report it to the FBI Internet Crime Complaint Center.
Not legal or financial advice. Real-estate law, disclosure rules, taxes and closing customs differ by state and sometimes by county. This guide explains how home sales generally work; check your state’s rules and talk to a real-estate attorney or other licensed professional before you sign anything.
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