What to Expect When Closing on a House
Dec 1, 2022
Nothing compares to the day you actually close on a house.
After all the work that goes into finding your new home – from saving up for the down payment to getting preapproved for a mortgage to possibly selling your old house – you’re finally going to take possession of it and move in.
It’s exciting, but if you’ve never been through closing on a house before, it can be extremely nerve-wracking, too. Take a moment to learn all about what happens on this big day, so you can relax and enjoy it.
What to Expect When Closing on a House
The closing date is set when you sign the contract, but the specific time of the closing is generally not locked in until a couple of weeks before the actual closing. All parties involved will be notified by the closing attorney or title company once the specific time is set.
Your mortgage lender will provide you with a list of closing documents required to complete the transaction and you’ll have a chance to review the settlement statement a few days prior to signing.
Before closing day, you’ll need to purchase homeowners insurance and have a final walk through of the property to ensure everything is in order. On closing day, you will meet at the closing table with your real estate agent, the title company representative (or closing attorney depending on your state).
How Long Does It Take to Close on a Home?
While the actual closing event takes about 60-90 minutes.
With mobile and online closings available in some states, it could be even faster. Also, cash transactions also typically go faster as well since there’s no mortgage lender involved.
What to Expect on Closing Day
Usually, the closing takes place at the office of a title company or closing attorney, but that’s not always the case. For example, it could also occur at the actual property as well, although this would often require a mobile notary.
During a closing, the buyer and seller will both review all of the legal documents associated with the sale of a home and then sign them. This will include the documents that are necessary for the lender to provide the buyer with a mortgage and those that officially transfer ownership of the home.
As the buyer, be sure to ask your real estate agent and lender what you should bring to your closing. They might have one or two unique requests.
Otherwise, it’s fairly standard that you show up with the following:
- A driver’s license, passport or other form of personal identification.
- Your closing disclosure, which you should have received a few days prior to the closing from your lender. This will also be provided at closing for your convenience.
- A cashier’s check or receipt for a wire transfer in the amount of the money you owe at closing, often referred to as the “cash to close” amount.
Aside from you and your real estate agent, some combination of the following people will usually be at the closing, as well:
- A closing agent (not required in all states)
- Title agent
- The seller’s real estate agent
- The seller
- Loan officer
In many cases, the seller doesn’t always need to actually attend the closing in person. All they’ll need to sign is the deed, the settlement statement and any other relevant transfer documents and they can do that prior to the closing. They may even be able to use power-of-attorney to have their representative provide the necessary signatures. Otherwise, the proceeds from the sale can be sent to them via wire without them being present at the closing itself.
Before signing the documents, a final walkthrough will also be conducted. This is to make sure that the home is in the condition it was when the buyer agreed to purchase the house. Obviously, if this isn’t the case, you probably wouldn’t want to continue with the closing.
What You’ll Need to Sign at a Closing
As the buyer, you’ll need to sign the following paperwork:
- Mortgage documents
- The promissory note
- The escrow disclosure
- Settlement statement, HUD-1, or ALTA
There will also be a number of disclaimers, disclosures, and documents the government requires the buyer to read and sign.
What the Buyer Has to Pay When Closing on a House
You could be required to cover all kinds of different costs when closing on a house, so be sure to talk with your agent beforehand or your big day could be ruined by an unpleasant surprise.
However, you should see all of the costs detailed on your loan estimate when applying for a mortgage. Your Closing Disclosure will have them listed out, too, though you won’t see it until three days before your closing.
Generally, the buyer needs to pay the following when they close on a house:
- A prorated amount of your new property taxes
- An initial payment toward your homeowner’s insurance coverage
- Any unpaid lender origination fees or other third-party fees
- Interest that will accrue prior to your first mortgage payment
- The title insurance premium
Depending on where you buy your home, you may also have to pay some of your HOA fees upfront. There will probably be other state-specific costs you have to cover, as well.
After the Closing on Your House Is Complete
Once the escrow company has paid off the lender, service providers, the seller, submits the deed to the county recorder, and gives you all of the legal documents associated with your new house, the closing is complete.
The seller has to give you all their keys to the property, including garage door openers and any other devices that would allow them to enter your house or control any of the home’s systems or appliances.
Then, they have to vacate the property (their possessions should already have been removed and the house cleaned) and you can begin the process of moving into your new house.
Work with an Experienced Realtor for a Smooth Closing
At face value, closing on a house is a fairly simple process, which is why it usually only takes an hour to complete.
Still, it’s also an extremely important process. Any number of things can go wrong that could delay the closing. That won’t just ruin your big day. It could be a serious issue if you’ve already moved out of your old place and need to begin moving into your new house ASAP.
That’s why you should always work with an experienced real estate agent. At SimpleShowing, we’ll connect you with one and you’ll qualify for our Buyer Refund program, which gives you $5,000 on average that you can put towards your closing costs.
Contact us today and we’ll give you all the details.