Uncategorized July 1, 2024

Understanding the Real Estate Closing Process

Buying a home is an exciting time, but it can be a whirlwind event. The process between receiving the purchase agreement and signing those final documents on Closing Day can seem daunting. To help you understand the real estate closing process, I’ve compiled an outline of what to expect.

Review & Sign the Purchase Agreement 

The closing process starts when both parties sign the purchase agreement, a legal contract that outlines the terms of the sale. Some of the things included might be:

  • The names and contact information of the buyer and the seller
  • A description of the property
  • The purchase price 
  • Financing terms
  • Any earnest money or due diligence deposits or amounts
  • Any contingencies necessary for the sale to proceed
  • Home warranty information, if included
  • The closing date
  • Any other miscellaneous provisions

Before signing the agreement, the buyer and seller should review the details and terms with their real estate agent to ensure its accuracy before committing legally and officially. 

Conduct a Title Search & Purchase Title Insurance 

Upon signing the purchase agreement, the title search company will work with an attorney to initiate a thorough investigation to verify that the property title is free from any liens, disputes, or legal complications. This essential process validates the seller’s legal authority to transfer property ownership.

Once the title search clears, the buyer must purchase a Title Insurance policy for protection against any title-related issues that may arise after the purchase. In some cases, the lender may also require the buyer to purchase a lender’s title insurance policy as a condition of mortgage approval.

Complete the Home Inspection and Appraisal 

Home Inspection

Regarding buyer protection, a buyer will also want to conduct a home inspection and appraisal during the closing process. A home inspection is imperative to identify any potential issues with the property. 

A purchase agreement typically includes a designated timeframe for the buyer to conduct the home inspection. If issues arise during the inspection that cannot be negotiated between the buyer and the seller, the buyer may be able to back out of the purchase agreement.

In this case, the buyer would forego their due diligence fee, but may be able to receive their earnest money deposit back.


An appraisal is needed to determine the home’s market value and ensure it will meet the loan amount. If a home appraises for less than the agreed purchase price, the lender may not cover the agreed-upon purchase price. In this case, the buyer can request a second appraisal, the buyer can pay the difference out of pocket, or the buyer and seller can renegotiate the purchase price, among other possibilities. 

Finalize Your Mortgage 

Simultaneously, throughout the closing process, the buyer will work closely with a lender to finalize the mortgage. Tasks include submitting required documentation such as income verification, bank statements, and credit reports. Upon loan approval, the buyer will receive a Closing Disclosure that details the final loan terms and closing costs. Read this document thoroughly to understand what it entails before the closing day. 

Perform a Final Walkthrough 

Shortly before the closing day, you’ll have the opportunity to perform a final property walkthrough. At this time, it is necessary to ensure that the home is in the agreed-upon condition and that the seller has completed all their agreed-upon repairs. If everything is up to par, you’ll be ready for the official closing day. 

Prepare Your Closing Costs

The buyer must pay the closing costs outlined in the Closing Disclosure on closing day. Before closing day, communicate with your bank to receive a cashier’s check to bring to closing day or arrange a wire transfer to cover the expenses. You will receive the keys to your new home when the deed is recorded and all payments are finalized.

Closing Day: Sign the Final Documents

Closing day is when you’ll meet with the closing agent, your real estate agent, and potentially the seller. Before this meeting, you’ll want to make sure you’ve done a few hand stretches because you’ll need to sign a stack of documents, including the deed, bill of sale, mortgage agreement, and any other necessary paperwork. Ensure you have read through each document carefully and ask questions if something is unclear. 


Once all the documents are signed and any funds are transferred, the closing agent will record the deed to the appropriate government office, officially transferring ownership to you. Once you receive the keys to your new home, you can start moving in! 

Partner with a Realtor for Closing

Although many moving parts happen simultaneously during the closing process, understanding what you must do can help you proceed confidently. You can ensure a successful closing free of hiccups by collaborating closely with your real estate agent, lender, and attorney. If you are looking for a realtor who knows the ins and outs of this process to join you in your journey, please reach out. I’d be happy to help!