What to Expect on Closing Day

Written by: Christy Rakoczy

The process of buying real estate can take weeks, or even months, as you find a home, make an offer, have that offer accepted, and obtain financing. The entire process culminates on one final day when the real estate is formally transferred to you from the previous owner. This process of transferring the real estate formally is referred to as the real estate closing.

What Happens on Closing Day?

Typically, the process of closing on a house begins with a walk through at the home or property. During the walk-through, you will make sure the home is in the same condition that it was when you made your offer. You’ll want to check to be sure that the sellers didn’t take anything out of the home that was supposed to convey (i.e,  come with it) and that no other material changes were made to the structure that weren’t expected.

Once you have finished this process, it is time for the final transfer to take place. Depending on the state where you live and the assistance you have had during the process, this transfer might occur at a real estate agency, at the office of a title company or in an attorney’s office. For most states and in most cases, title companies handle this process, but you will need to check the rules for the place where your real estate is located.

The Closing

The closing is typically attended by the buyer, the seller, their respective real estate agents, an attorney or representative from the title company, and sometimes the mortgage lender or loan processor. In some cases, one or more of these parties may not actually be present, but instead will take care of their obligations beforehand or by mail.

As the buyer, you will have to come prepared with a cashiers check for the total amount of money you are putting down on the house, as well as for the total amount of closing costs that you owe for things such as the appraisal, the transfer taxes and the loan origination. You may also wire this money beforehand. Personal checks will not be accepted for these funds. You will receive a detailed sheet in advance from the title company or other agent handling the closing specifying exactly how much you are required to pay.

At the closing, the money will change hands and the seller will receive a check for the amount due to them, as will the real estate agents who will be paid their commission.

You will have to sign a great deal of paperwork at this time, including the mortgage commitment. You will also need to know how you are taking title to the land, which means how your ownership is structured. The manner in which you take title will vary depending on whether there are one or more owners and how they wish to share ownership. For instance, if you and a friend buy a home together and you want the property to transfer to the co-owner upon your death without going through the probate process, you could structure your ownership as joint tenants with rights of survivorship. Typically, you should speak with a real estate attorney about your specific situation to determine what ownership structure is best, although the real estate agent or title company you are working with can also explain your options to you in most cases.

Owning Your Home

Once you have signed all of the required paperwork and the funds have been distributed to the appropriate parties, the closing is over. The home is officially yours and you’ll typically receive a copy of the deed on that day or in the mail shortly after the closing.


What to Expect on Closing Day

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