The Closing Process: What to Expect When You’re Buying a Home
Your offer was accepted, meaning it’s time for the final (and most important) step when you’re buying a home: the closing process. Whether you’re a first-time buyer or just need a refresher, knowing what to expect can help you steer clear of surprises and feel more confident heading into closing day. In this article, we’ll break down what happens during closing, how long it takes, how to prepare, and how to avoid common delays so you’re ready when it’s time to sign on the dotted line.
What is the closing process on a home?
The closing process is the final step when you’re buying a home, with ownership officially transferring from the seller to the buyer. Also called “settlement” or “escrow” (depending on where you live), closing involves several important steps to make sure the deal is legally and financially secure. By the time you reach this stage, you’ve likely made an offer, secured financing, completed inspections, and negotiated any needed repairs. Closing ties all these pieces together. During this phase, the buyer and seller wrap up the final details including:
Confirming the buyer’s loan is fully approved and funded
Clearing the property title of any claims or disputes
Meeting all contingencies (e.g., inspection repairs or appraisal requirements)
Preparing and reviewing the documents that transfer ownership
For the buyer, closing day is when you officially take ownership of the home (and often receive the keys). For the seller, it means receiving payment and handing over possession. While closing day refers to the actual signing and transfer of ownership, the closing process includes every step leading up to that moment—which can take several weeks, depending on the sale.
What happens at closing?
Closing day is the big moment when everything comes together, but what happens at the closing table itself? In short, a lot of paperwork, a few important payments, and (finally) the official handoff of the home. Signed, sealed, delivered! Here’s a breakdown of what to expect…
Who typically attends the closing?
Depending on where you live and how your deal is set up, you may see several familiar faces at the closing including:
You (the buyer)
The seller
The real estate agents (buyer’s and seller’s)
The closing agent or escrow officer (who oversees the process)
A representative from your lender (if you’re using a mortgage)
A real estate attorney (required in some states)
In some cases, especially when it comes to remote or “mail-away” closings, buyers and sellers may sign documents separately and/or electronically.
What will you sign?
Be prepared for paperwork—lots of it. Some of the documents you’ll sign include:
Closing Disclosure: You should receive this document—which outlines the final loan terms, closing costs, and fees—at least three business days prior to closing. Review it carefully and flag anything that doesn’t match your loan estimate.
Promissory Note: This is your promise to repay the mortgage loan and includes terms such as interest rate and payment schedule.
Mortgage or Deed of Trust: This document secures the loan against the property, giving your lender the right to foreclose if you fail to make payments.
Deed: Transfers legal ownership of the home from the seller to you.
Affidavits or Declarations: These cover miscellaneous items such as confirming your identity, acknowledging the terms of the sale, and swearing you haven’t recently filed for bankruptcy.
Your closing agent (and attorney, if you have one) will explain each document before you sign.
How will you pay?
Along with signing papers, you’ll need to bring your share of the closing costs that typically include:
The down payment (minus any earnest money you’ve already paid)
Loan-related fees (e.g., origination fees)
Prepaid property taxes and homeowners’ insurance
Title insurance and other closing service fees
This payment is typically made via a cashier’s check or wire transfer, with personal checks often not accepted.
How will you get the keys?
The best part of closing? Walking away with the keys to your new home! In many cases, the seller hands them over right then and there after the paperwork is signed and the funds are transferred. If your purchase agreement includes a caveat such as a seller rent-back period, however, the actual move-in date may take place further down the road.
How can you prepare for closing?
The closing process certainly comes with its own to-do list, most of which plays out in the weeks leading up to closing day rather than all at once. Staying on top of these steps, outlined here, can help prevent delays and keep things moving…
1. Get a home inspection
A home inspection helps uncover any major issues such as structural damage or electrical problems. If repairs are needed, this is your chance to negotiate with the seller or request credits.
2. Secure homeowners’ insurance
Lenders usually require proof of homeowners insurance before funding your loan, so be sure to have your policy in place before closing and check if extra coverage (e.g., flood insurance) is recommended in your area.
3. Stay in touch with your lender
Your lender may request updated documents such as pay stubs or bank statements during the process. Respond quickly and avoid big financial changes (e.g., opening new credit accounts or switching jobs) during this time, which can affect your loan approval.
4. Review your closing disclosure
You’ll receive your closing disclosure at least three days before closing. Review it carefully, comparing it to your loan estimate to ensure the numbers match, and flag any errors right away.
5. Confirm closing details
Double-check the time, date, location, and what you’ll need to bring (typically a photo ID and your closing funds), asking if you’ll meet in person, virtually, or a mix of both.
6. Prepare your closing funds
Your closing disclosure will list the exact amount due for your down payment and closing costs, with these funds typically paid by certified check or wire transfer (never by personal check).
Reminder: Always verify wiring instructions by phone with your closing agent to avoid fraud.
7. Do a final walk-through
Usually done within 24 hours of closing, the final walk-through ensures the home is in the agreed-upon condition. Confirm all needed repairs are complete, included appliances are on location, and no new damage has occurred.
How long does it take to close on a home?
It’s one of the most common questions buyers ask: “How long does this whole closing thing actually take?” The answer, as it turns out, depends on several factors but generally materializes as 30 to 45 days (meaning the time between when an offer is accepted and the closing itself).
That said, every home sale is a little different. Some closings wrap up quickly while others stretch out longer depending on financing, inspections, and any hiccups that pop up along the way.
Average closing timelines
Mortgage-financed purchases: Around 30 to 45 days
All-cash purchases: Often as quick as 1 to 2 weeks
Mortgage-financed purchases take longer because lenders need time for loan approval, appraisals, and paperwork. Cash deals skip these steps and thus often close much faster.
What happens during this time?
The lender orders an appraisal to confirm the home’s value.
The title company performs a title search to make sure there are no legal claims against the property.
Home inspections take place, with repairs negotiated as necessary.
The buyer secures homeowners insurance and provides any requested documents to the lender.
The lender completes the underwriting process, verifying the buyer’s financial situation to assess loan approval accordingly.
Both parties work to satisfy any contingencies listed in the contract (e.g., financing, inspection, or the sale of a current home).
What can slow things down?
Several factors can potentially delay closing, including:
Appraisal issues (if the home appraises for less than the sale price)
Incomplete loan documents or delayed underwriting
Title problems (e.g., an undisclosed lien on the property)
Unmet contingencies (such as repairs not completed on time)
Buyer-side delays (e.g., missing paperwork or last-minute credit changes)
How to help keep things on track
Stay in close contact with your real estate agent and lender throughout the process.
Respond quickly to any document requests.
Avoid big financial changes such as switching jobs, opening new credit accounts, or making large purchases until after you close.
Keep an eye on your closing disclosure and ask questions early if anything seems off.
While it might feel like a long wait, the closing timeline is there to make sure all details are handled properly and thus avoid unwanted surprises once you get the keys.
Common issues that delay closing (and how to avoid them)
Most closings go off without a hitch, but a few common issues (listed below) can cause delays. The good news? Many are preventable if you know what to watch for.
1. Low home appraisal
If the home appraises for less than your offer, the lender may not approve the full loan amount.
How to avoid it:
Make sure your offer aligns with recent comparable sales.
If the appraisal is low, negotiate with the seller, cover the gap, or dispute the appraisal.
2. Financing that falls through
Even with pre-approval, a loan approval can fall through if your financial situation suddenly changes due to new debt, a job change, credit score drop, etc.
How to avoid it:
Avoid major financial changes until after closing.
Respond quickly to lender requests and check before making any big moves.
3. Title issues
Liens, unpaid taxes, or disputes over ownership can hold up closing until they’re resolved.
How to avoid it:
Work with a reputable title company and purchase title insurance.
Make sure any title issues are cleared up before closing day.
4. Unmet contingencies
If common contingencies (e.g., home inspections, financing approval, or the completion of agreed-upon repairs) aren’t met, closing can stall or fall through.
How to avoid it:
Stay in close contact with your agent to track contingency deadlines.
Confirm repairs are complete before the final walk-through.
Communicate early if you foresee any issues meeting your own contingencies.
5. Document or payment issues
Missing paperwork, incorrect wire transfers, or confusion about closing costs can cause last-minute delays.
How to avoid it:
Review your closing disclosure as soon as you receive it.
Verify wire instructions directly with your closing agent (not relying on email alone).
Bring all required documents and your photo ID to the closing.
Final thoughts: closing with confidence
When you’re fully prepared for closing, you can focus on what comes next: settling into the place you’ve worked so hard to procure. Stay in touch with your agent and lender, stay organized, and ask questions along the way so that all that’s left is a few signatures to get the keys in your hand.
Have questions about closing and/or the home-buying process? Schedule a FREE discovery call with one of our CFP® professionals so we can help!
FAQs
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Closing costs usually range from 2% to 5% of the home’s purchase price and include loan fees, title insurance, appraisal costs, and taxes. Lenders provide a loan estimate early on in the process and a closing disclosure before closing with the final numbers.
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The closing date is typically set when you sign the purchase agreement but can shift if there are delays in financing, repairs, or title clearance, with your agent keeping you apprised of any schedule changes.
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If you can’t be there, you may be able to sign documents remotely or assign power of attorney to someone else to sign on your behalf. Discuss the options with your agent and closing team well in advance.
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Vision Retirement is an independent registered advisor (RIA) firm headquartered in Ridgewood, New Jersey. Launched in 2006 to better help people prepare for retirement and feel more confident in their decision-making, our firm’s mission is to provide clients with clarity and guidance so they can enjoy a comfortable and stress-free retirement. To schedule a no-obligation consultation with one of our financial advisors, please click here.
Disclosures:
This document is a summary only and is not intended to provide specific advice or recommendations for any individual or business.
