Closing on a House: Expert Advice for Homebuyers

Closing on a house is the final step in a home purchase or sale. It’s a legal process for the official property ownership transfer from a seller to a buyer. When you close on a home, a real estate attorney or a closing agent at a title company often handles the process.

Closing can be complex, so we’ve asked real estate agents from across the country for their advice to make your closing day as simple and smooth as possible. 

Closing day is possibly the most important day in the sale and purchase of a home. It’s not just legally significant but also emotionally significant. 

“For a buyer, closing day epitomizes new beginnings with the thoughts of making new memories and building a home together,” says Anthony Rosina, a real estate agent in Bridgehampton, New York.

After closing, a seller is no longer responsible for the property they once called home. As the buyer, however, you may have just made one of the most significant purchases of your life.

Numerous steps lead up to closing day after an offer is accepted. As the buyer, you will typically make an earnest money deposit after your offer is accepted. In most cases, you’ll also need to secure homeowners insurance. A home inspection,  home appraisal and loan approval typically follow. There’s also the process of putting together all of the closing documents. 

“The closing process is a symphony of moving parts, anticipated prior to and leading up to closing,” says Caroline “Pinky” Luat Young, a real estate agent in Los Feliz, California. “While the lender (if there is one) lands the plane in the final stretch, escrow and realtors will coordinate all the parties.” 

Luat Young mentions that California files, particularly, have over 50 items. A good real estate agent will either audit their own brokerage file or hire a transaction coordinator to handle it. Either way, diligence is required. 

“A good real estate broker is essential to help ensure that the closing process goes smoothly,” Rosina says. “Verifying the time and place of the closing, confirming the attendance of key players, and staying in contact with attorneys is a must. Continuous communication is critical to keep all parties on the same page.”

The documents required to close will vary depending on where you plan to buy, but the following items are common across most states. 

• Closing disclosure: The closing disclosure is a detailed list of the costs paid at closing and over the lifetime of the mortgage. 
• Deed of trust: This is an agreement between the buyer and their mortgage lender, which states that the property will be held in trust by a third party until the loan is paid in full. 
• Deed: The deed is a document that transfers the property from the seller to the buyer.
• Mortgage note: This document outlines the details of a mortgage, including monthly payments, terms and penalties. 
• Purchase agreement: This is a legal agreement between the buyer and seller describing the terms of the real estate transaction. 

“All parties attending the closing need to bring a government-issued photo ID, usually a driver’s license or passport,” Anthony Rosina explains. They’ll also need to bring “proof of home ownership and insurance, and certified checks to cover closing costs and expenses. Coming prepared with these can help validate identity and ensure that the closing process goes smoothly.”

Buyers should anticipate paying for closing costs associated with purchasing a home. 

“Closing costs may include loan origination fees, any points you may have bought to lower your mortgage interest rates, insurance premiums, notary fees, escrow and title fees,” says Mara Eichelmann, a real estate agent in Saint Helena, California. 

Additional closing costs often include prorated property taxes, title transfer, transfer taxes, appraisal fees, attorney fees, lender fees and broker commissions. 

“Common closing costs will vary between buyer and seller,” Pinky Luat Young explains. “But a good estimate is 1% to 2% percent of the purchase price for the buyers and 6% to 8% percent for sellers.” 

Your real estate agent can help strategize the best way to lower your costs. 

“While you can't really budge on government fees or taxes, sometimes you can work with your lender on their fees and even ask the seller to chip in on some costs,” Sharon Parker, a real estate agent in New Hampshire and Maine, says. “It's worth shopping around for better deals on things like title insurance and home inspections, too.”

At a typical closing date, you must prove your identity, review and sign documents, pay your fees and receive the keys. 

“In California, closing day consists of the title company delivering all documents to the recording office to be signed and sealed,” Pinky Luat Young says. “They will then inform the escrow office, which will communicate that the transfer of title is confirmed. Escrow informs the Realtors, who then coordinate a key handoff if not already arranged.”

“A wide variety of things occur on closing day,” Rosina says. “A final walkthrough usually happens on the morning of the closing to confirm that the house and property are in order and that no outstanding items are remaining. The closing itself can take upwards of a few hours, with tired wrists a common complaint from the myriads of signatures that are required. Clear title for the property will be established, final papers are signed, mortgages (if applicable) are confirmed, monies are paid and keys are exchanged.”

It’s not uncommon for issues to arise on closing day. For this reason, it’s important to talk with your real estate agent to mitigate any potential problems or setbacks. 

A variety of delays could occur. These include lender funds not arriving on time, as well as delays with lender approval or buyer funds. If one party signs too late in the day, funding and recording could be delayed until the next business day, which is a problem if the buyer is planning on moving in on the same day of the closing. 

“So many things can happen, from title issues to termite completion delays, to sellers refusing to leave because they need more time to ‘say goodbye’ to their home,” Pinky Luat Young says. “It’s important to set expectations and pay constant attention throughout the transaction.” 

Brian Barrows, a real estate agent based out of Rehoboth Beach, Delaware, has seen many issues that come about on closing day during his time in the industry. Sometimes, things break during the walkthrough, such as a toilet or an HVAC system. Other times, the sellers take appliances or furniture that was agreed to be left to the buyers in the sale. Homes could be left unclean, attorneys may still be working on survey issues, or the required certificate of occupancy isn’t issued on new construction. 

If you’re getting ready to purchase a home, it’s important to avoid any large purchases or new debts. 

“Please, please, please, do not get a new car, a new loan, or make any large purchases until after you have closed,” Eichelmann says. “I have seen deals fall apart because the buyers were so excited about furnishing their new home and went on a furniture shopping spree, which impacted their loan-to-income ratio.”

Taking on these additional tasks is a wise decision after you’ve closed on your home. 

Many of the agents we interviewed suggested changing all of the locks on your new home.

Switch the utilities to your name and schedule all the services required for your home, including sewer line servicing and pest management.

The best time to do a deep clean is while the home is still empty. Tasks like painting and refinishing or installing new flooring will also be easier without your belongings in the house. 

Submit a change of address with the post office. Your new address should also be on file with your workplace, banks and other important contacts. 

You may want to have a fully furnished home as soon as you move in, but you’ll have a better idea of what you need after having lived there for a bit. “Purchase your must-haves and then wait until you move in and feel the energy of the place,” says Joel Goldman, a real estate agent in Baltimore, Maryland. 

Closing on a home involves numerous legal documents, financial responsibilities and administrative tasks. As a buyer, the process will be much easier if you know what to expect beforehand. Your real estate agent is a valuable resource who can help you navigate this last important step in buying a home.