Not sure what to expect at closing? You’re not alone. Most homebuyers know it involves a stack of papers to sign, but what actually happens on the big day? We’ll walk you through the process from start to finish so you know how to prepare and what to bring to home closing.
Understanding the House Closing Process
The house closing process is the culmination of everything that happens after the seller accepts your offer, like the home inspection, price negotiations, and mortgage approval. When you sit down at closing, you’ll have all these details sorted out and in writing. And once you sign the dotted line, the house is officially yours.
What does ‘closing a house’ mean?
Closing on a house is the last step in a real estate transaction. After the buyer and seller sign legal documents and distribute funds, the property title transfers to the buyer, making them the owner.
How does closing work?
Closing day on a house typically includes the following steps. The buyer will do a final walk-through, pay closing costs, and sign documents to finalize the sale of the home. Then, the real estate agents receive their commissions and the remaining proceeds go to the seller. Once complete, the buyer gets the keys.
How long does closing on a house take?
On average, your closing date will be four to six weeks after the seller accepts your offer and you sign a purchase agreement. The home buying closing process requires a bit of prep work beforehand, but on the actual day of home closing, you’ll probably only need one to three hours to wrap it up.
What to Expect on Closing Day
State laws vary slightly on where the closing must take place and who needs to be in attendance. But your appointment will likely be held at the office of the title company, an attorney, or the lender. Your real estate agent should confirm the details for you.
Depending on your state, the following individuals may be present:
- Buyer and seller
- Buyer and seller agents
- Settlement/closing agent
- Attorney (this could also be the closing agent)
- Title company representative
- Mortgage lender
Some representatives can sign/authorize documents in advance, so they don’t need to be physically present at closing.
What do you bring to the house closing?
Before you arrive, gather copies of any paperwork you signed throughout the homebuying process for reference. You’ll also need to bring the following items:
- Two forms of ID – One ID must be government-issued and have a photo. Your driver’s license or passport is ideal. For the second ID, you can use anything with your name printed on it, like a Social Security card or credit/debit card.
- Proof of homeowners insurance – Your lender will need to see your homeowners insurance policy declarations page or a certificate of insurance.
- Cashier’s check or wire transfer for closing – Homebuyers often ask – can you pay closing costs with a credit card? Unfortunately, no. You have the option of bringing a cashier’s check for closing or completing a wire transfer prior to the appointment.
- Closing Disclosure – Your lender should provide a breakdown of all final costs on a Closing Disclosure at least three days prior to the closing date so you know what to pay. Bring this with you to compare to the documents you’re signing at closing.
What happens at closing?
- You’ll review and sign all your loan documents. Most importantly, the deed of trust, promissory note, and closing disclosure.
- You’ll share proof of homeowners insurance.
- You’ll provide a certified or cashier’s check to cover the down payment, closing costs, prepaid interest, taxes and insurance.
- Your lender will distribute the funds covering your mortgage amount to the closing agent.
- The closing agent will distribute the funds to the real estate agents (for commission) and the seller.
- You’ll set up an escrow account to cover property taxes and homeowners insurance, in addition to your monthly mortgage payment. (This is not always required)
- The property title will be signed over from the homeowner to the buyer, transferring ownership.
- You’ll get the keys!
Closing on a house may feel intimidating, but if you’re prepared, it’s actually no big deal. Read everything closely, ask plenty of questions, and your closing will go off without a hitch.