The standard set of seller closing documents in Florida consists of four primary documents outlined below.
The seller document set can seem small, but as outlined below, the risk of not understanding what is contained within them can be large.
- Closing Statement (a/k/a Settlement Statement) – The closing statement is the document that provides an itemized or detailed breakdown of the final closing costs for the transaction, including any mortgage loan charges and costs.
The closing statement shows both credits (amounts you have already paid toward the purchase price or loans you are obtaining) and debits (amounts you have to pay at closing). The debits and credits are totaled (usually at the bottom of the closing statement) to illustrate a final amount due or payable in order to balance out the debit and credit sides. It is important to walk through the closing figures to ensure that they are consistent with the allocation of closing costs under the signed purchase and sale contract. This would also be a great time to confirm that your initial quoted closing costs are consistent with the actual closing statement figures.
- Bill of Sale – The bill of sale is the the document that transfers any of the personal property (as opposed to the real property) being sold with the residence. Personal property would typically include a range or an oven, a refrigerator, dishwasher, disposal, ceiling fan, intercom system, light fixture(s), drapery rods and draperies, blinds, window treatments, smoke detector(s), garage door opener(s), security gate and other access devices, and storm shutters/panels, wine cooler, washer and dryer. It is important to review the list of personal property described in the bill of sale to ensure it follows the list set forth in the signed purchase and sale contract. Another important element of the bill of sale is to determine whether the transfer is made with or without representations or warranties as to ownership or whether it places additional obligations onto the seller beyond those required by the signed purchase and sale contract.
- Deed of Conveyance – The deed is the document that transfers the real property (as opposed to personal property), along with any physical structures on the real property (typically the residence, pool, screened lanai, guest house, etc.). In Florida, the deed can either be a warranty deed, special or limited warranty deed, trustees deed, or personal representative’s deed. A quit claim deed (see Quit Claim Deed vs. Warranty Deed) should never be used in real estate transaction with a purchase price paid for the real property. The deed is one of only a few documents that may be recorded in the public records (where the real property is located) at the closing of the transaction, and this recording of the deed allows all the world to see the deed and track the ownership of the real property. It is important to review the deed to ensure that it accurately reflects the names of the parties to the transaction, properly illustrates how the buyer will be taking title to the real property (see Taking Title to Real Estate – Legal Guidance is Key), and correctly describes the real property being transferred.
- Title Certification (a/k/a Seller’s Closing Affidavit) – The title certification is the document that requires the seller to make specific statements and affirmations as to the status of the title to the real property being sold. These statements and affirmations are made under penalty of liability or perjury, and generally include the following: there are no outstanding liens or mortgages, boundary line disputes, or other claims being made against the real property, there are no outstanding bills for labor, materials or supplies related to the real property, and there are no violations of governmental laws, regulations or ordinances pertaining to the use of the real property. The title certification is intended to capture any knowledge the seller may have as to the status of title to the real property to the extent the information is not reflected in the public records. If any of the statements or affirmations made by the seller are determined to be inaccurate, the seller could be subject to claims for liability that arises from the misstatement. It is important to review the title certification to ensure that it does not include any statements the seller is not comfortable making, either because they lack the knowledge to make the statement or it is inconsistent with the requirements of the signed purchase and sale contract.
While the standard set of seller documents is generally small in number, as noted above, the seller documents include a large amount of representations, warranties, and statements as to the personal and real property being sold.
This is why it is important to have legal oversight of the closing process to ensure the seller understands the contents of the documents they are signing at the closing of the sale (see Selling a Home – Do I Need an Attorney?).