What happens during a real estate closing?

The Final Step in Your Home Buying Journey

After weeks (or even months) of searching, negotiating, and financing, the big day is finally here—closing day! But what exactly happens during a real estate closing? If you’re a first-time buyer or even a seasoned homeowner, the closing process can feel a little intimidating. Don’t worry—we’re breaking it all down so you know exactly what to expect.

What Is a Real Estate Closing?

A real estate closing is the final step in the home buying or selling process. It’s the moment when ownership officially transfers from the seller to the buyer. All the contracts, agreements, and financial transactions come together in one last meeting before you get the keys to your new home.

What to Expect on Closing Day

1. Reviewing and Signing Documents

One of the main events of a real estate closing is signing a stack of important documents. These may include:

• The Closing Disclosure – This document details all the loan terms, closing costs, and financial details of the transaction.
• The Promissory Note – A legal promise to repay the mortgage loan.
• The Mortgage or Deed of Trust – This secures the loan by using the property as collateral.
• The Deed – Transfers ownership of the property from the seller to the buyer.
• Title Documents – These confirm that the seller has the legal right to transfer ownership.

Make sure to carefully review each document before signing. If anything looks different from what you expected, ask questions—this is your last chance to clarify terms before committing.

2. Paying Closing Costs and Other Fees

Before you can walk away with the keys, you’ll need to cover various closing costs. These typically include:

• Loan origination fees
• Title insurance
• Appraisal and home inspection fees
• Escrow fees
• Property taxes and homeowner’s insurance

You’ll likely pay via a wire transfer or cashier’s check. Your lender will provide an exact amount in your Closing Disclosure ahead of time.

3. Final Walkthrough of the Property

Most buyers do a final walkthrough of the property within 24 hours of closing to ensure:

• The agreed-upon repairs (if any) were completed.
• The home is in the expected condition.
• There are no unexpected damages or issues.

If something is wrong, you may be able to delay closing until the issue is resolved.

4. Title Transfer and Recording

Once all documents are signed and funds are transferred, the title company or closing attorney will officially record the transaction with the local government. This makes you the legal owner of the property.

5. Receiving the Keys!

Congratulations—you’re now a homeowner! Once everything is finalized, the seller will hand over the keys (or you’ll get them from the agent or escrow officer).

How Long Does a Closing Take?

A typical real estate closing takes about one to two hours. However, delays can happen if there are last-minute issues with financing, title searches, or missing documents.

Common Closing Day Issues and How to Avoid Them

1. Last-Minute Credit Changes

Lenders often perform a final credit check before closing. If you’ve made large purchases or taken on new debt, it could affect your loan approval. Avoid making big financial moves until after closing.

2. Title Issues

Sometimes, problems with the property title—like unpaid liens or unknown heirs—can delay closing. To prevent surprises, work with a reputable title company early in the process.

3. Missing Documents

Make sure you have all necessary documents, such as a valid ID, proof of homeowners insurance, and your cashier’s check (if required).

4. Appraisal or Inspection Problems

If the home appraisal comes in lower than expected or an inspection reveals major issues, you may need to renegotiate with the seller.

FAQs About Real Estate Closings

1. Can I back out on closing day?

Yes, but it comes with serious consequences. If you back out without a valid contingency (like a failed inspection), you may lose your earnest money deposit or even face legal consequences.

2. Who attends the closing?

Typically, the buyer, seller, real estate agents, closing attorney, and title company representative are present. Some states allow remote or mail-away closings.

3. What happens if the seller doesn’t show up?

If the seller fails to show, the closing may be delayed or canceled. In some cases, legal action may be necessary.

4. Do I need to bring money to closing?

Yes, unless you’ve arranged for all payments to be wired. Expect to cover your closing costs and down payment (unless using a no-down-payment loan).

5. When do I start paying my mortgage?

Your first mortgage payment is usually due on the first of the month after your first full month of ownership.

Final Thoughts

A real estate closing might seem overwhelming, but with the right preparation, it’s just another step toward homeownership. Understanding the process helps you walk in with confidence, ready to sign on the dotted line.

Thinking about buying or selling? Work with a trusted real estate professional to ensure a smooth closing experience!