Closing on a House: A Step-By-Step Buyer’s Guide

The process of closing on a house is the final stretch before home ownership is transferred and the property becomes legally yours. If you’re a new homebuyer, the closing process and its various steps can be confusing and intimidating. This short guide will outline the home closing process and help simplify your final steps to home ownership.

10 Steps to Closing on a House

The closing process can vary from transaction to transaction but generally tends to follow the same basic milestones. Here are 10 major steps of the closing process you’ll need to follow to complete your home purchase.

1. Offer and Acceptance

The closing process typically begins when the seller accepts your offer to purchase the home. This agreement sets the terms, including the purchase price and any contingencies.

2. Open an Escrow Account

Escrow plays a pivotal role in the real estate closing process. An escrow account is established to hold funds and documents until the transaction is finalized. This account is managed by a neutral third party, such as an escrow agent or title company, which also manages the transfer of the property title.

3. Conduct a Title Search and Obtain Title Insurance

A title search ensures the property is free of liens or ownership disputes so you can be sure you’re buying a home with a clear title. Meanwhile, title insurance protects you from future claims against the property and covers legal costs if past owners have unresolved claims. Together, a title search and insurance provide a buyer with legal safeguards and extra peace of mind during the closing process.

4. Schedule a Home Inspection

Hire a professional inspector to evaluate the property’s condition. Address any issues identified during the inspection by negotiating repairs or price adjustments with the seller. While costly, this will save you from any unexpected repairs and expenses after closing.

5. Negotiate Closing Costs

Work with the seller to determine who will cover specific closing costs, which may include loan fees, appraisal fees, and title insurance. Always review your settlement statement thoroughly to understand what costs you’re responsible for and if any are negotiable.

6. Secure Financing

Finalize your mortgage by submitting required documents, locking in your interest rate, and obtaining loan approval. Ensure you receive a Loan Estimate and Closing Disclosure from your lender. Timelines for a mortgage approval can vary, so stay in constant communication with your lender to monitor progress and respond promptly to any additional requests they make.

7. Review All Documents

Carefully review the Closing Disclosure (or settlement statement), which outlines the final loan terms and closing costs. Pay special attention to any discrepancies in loan terms or fees to avoid unexpected expenses in the future. Verify all details are accurate and address any remaining issues immediately.

8. Conduct a Final Walk-Through

Perform a final inspection of the property within 24-48 hours before closing. Confirm the property is in the agreed-upon condition and that all negotiated repairs have been completed. Following a walk-through checklist can be a convenient way to personally check each area of the home ands its condition.

9. Attend the Closing Meeting

At the closing meeting, sign all necessary documents, including the deed, mortgage, and promissory note. Pay the remaining closing costs and down payment. Address any potential closing delays, such as remaining problems from the title search or home inspection.

10. Transfer of Ownership

Once all documents are signed and funds are transferred, the title is recorded, and ownership officially transfers to you. You’ll receive the keys to your new home and will finally be ready to begin moving in. Congratulations!

Conclusion: From Buyer to Homeowner

With the closing transaction complete, it’s time to enjoy your new home! Before putting your closing behind you, take care of any post-closing responsibilities you may still have to a third party other than your lender. Next, you’re ready to begin your transition into the next step of your journey as an official new homeowner.

Interested in closing on a house or making that first leap into home ownership but unsure where to start? Contact us today to connect with an expert real estate agent for help on your homebuying journey, or start a property search in your local area now.