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If i sell my home and have equity in it who pays me? Does the title co reimburse me at closing or does the lender pay me after the new mortgage is recorded?

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    Welcome to Personal Finance & Money. Why would anyone other than the purchaser be the one giving you the money? – dg99 Sep 3 '15 at 22:16
  • i understand now i am sorry i got it, the title co cuts the check. – Yvette Sep 3 '15 at 22:17
  • I have a mortgage that needs to be paid off – Yvette Sep 3 '15 at 22:18
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    Could you edit and add a country tag – Dheer Sep 4 '15 at 2:58
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In the United States most residential real estate transactions employ a title company to process all the paperwork and transfer all the funds. Some paperwork has to be filed with the local government, but they also have to deal with the banks/mortgage companies on the two ends of the transaction. At closing both parties will sign a ton of paperwork all of which was coordinated by the title company.

As for the funds: The buyer will write a check; the lender will send over the loan commitment papers for the rest of the money.

How much money: that depends on the purchase price, the deposit, the down payment, the taxes and fees, an other closing costs they are responsible for (initial escrow, inspection, title insurance...).

The seller hopefully doesn't have to write a check, but if they underwater they will have to bring funds to closing. From the incoming funds the title company will send money to the old lender, the real estate agents, the local government to record the deed.

The sellers escrow money with the old lender may end up being sent back to the seller or some of the funds could be transferred to the buyer to help cover the portion of the real estate taxes.

From the perspective of the buyer they will only write two checks (one at the start of the process for the deposit, and one on closing day for their portion of the transaction. The seller will hopefully walk away with a check.

Of course determining if they will owe taxes for the transaction depends on a lot more information.

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In the US, the title company usually collects all money being paid by parties to the sale (including the buyer, seller, and mortgage companies) and then pays out money where its due to the respective parties (the seller, and possibly mortgage companies, housing inspectors, etc.) If you have equity, meaning that you sold your house for a price greater than what you owed on your mortgage, you'll typically get them money from the title company, but they are really passing through money that they got from the buyer (less whatever fees are going to the title company itself and other third parties involved).

One misconception, however, is that if you paid off part of your mortgage over time that you automatically "have equity." That's really only true if you find a buyer willing to pay a price greater than what's left on your mortgage. When housing prices decline, it's possible that you as the seller may need to bring a check to closing and do not get any money back. (They buyer is presumably bringing a bigger check, but you would need to make up the difference between what the buyer pays and what you still owe on your mortgage.)

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If you sell your home and it has equity, meaning the price you sell at is higher than the mortgage remaining on the property, then the money the purchaser pays you for the propery goes to pay off the remaining mortgage and any other fees owing (including commissions), and any balance left over (equity) is what you receive from the sale.

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    Mark, I'll offer you a +1 if you take a moment to edit in an explanation of the roll of title company. Which Yvette clearly doesn't understand. – JoeTaxpayer Sep 4 '15 at 0:26
  • "the money the purchaser pays you" ... so you are saying the check is in the name of Yvette and he pays the balance to Mortgage Bank. OR the Check is in the name of Mortgage bank and they take their due and write a check to Yvette or the Buyer writes 2 checks ? – Dheer Sep 4 '15 at 3:01
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    I think Mark meant "the purchase price", not literally that Yvette gets the full check. At the closing, Mark describes the math that occurs to get to the balance paid to Yvette at that time. – JoeTaxpayer Sep 4 '15 at 17:48
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    In Australia the normal process is that both parties have their solicitors or conveyancer (or can act for themselves) meet at settlement, the vendor tells the purchaser what cheques to provide - one for the bank, one for the real estate and one for the vendor (with balance after all fees paid). The title gets released from the vendor's bank to the purchaser's bank or to the purchaser. – user9822 Sep 4 '15 at 22:44

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