What Do You Do on Closing Day for a House?

Closing day in a real estate transaction marks the culmination of the home-buying or selling process, when property ownership officially transfers from seller to buyer. This event finalizes all agreements and financial arrangements. Understanding the procedures involved ensures a smoother transition for both parties.

Pre-Closing Preparations

Before the closing meeting, several steps require attention from both buyers and sellers. These actions ensure all terms of the purchase agreement are met and financial obligations are clear. Completing these tasks diligently can prevent unexpected issues on the day of transfer.

A final walk-through of the property is a recommended step, occurring within 24 hours to a few days before closing. This allows the buyer to verify the property’s condition has not substantially changed since the purchase agreement was signed. Buyers inspect for new damage, confirm agreed-upon repairs are complete, and ensure all included items, like appliances, are present and working. If issues arise, communicate them immediately to the seller or agent for resolution, which may involve a credit or delay.

Reviewing the Closing Disclosure (CD) or Settlement Statement is a preparatory step for buyers. This document, provided at least three business days before closing, details the final loan terms and all associated costs. Buyers should compare it against their initial Loan Estimate to identify any discrepancies in the loan amount, interest rate, or monthly payments. Verifying the accuracy of closing costs, credits, and prorated expenses, such as property taxes or homeowners association fees, is also important. Buyer closing costs typically range between 2% and 5% of the home’s purchase price, while seller costs can range from 2% to 10% of the sale price, often including real estate commissions.

Buyers must have all required documents and funds ready for closing. A valid government-issued photo identification, such as a driver’s license or passport, is mandatory for identity verification. The down payment and closing costs must be provided in certified funds, typically a cashier’s check or wire transfer, as personal checks are not accepted for large sums. Certified funds ensure the money is legitimate and immediately available for the transaction.

The closing meeting typically involves several participants. These commonly include the buyer and seller, their respective real estate agents, a representative from the lender if financing is involved, and the closing agent or attorney who facilitates the process. A notary public is also present to officially witness signatures on legal documents.

The Closing Day Procedure

On closing day, the focus shifts to the formal execution of the real estate transaction. The meeting typically begins with introductions among attendees, setting the stage for the systematic review and signing of numerous legal documents that finalize the sale.

The document signing process involves a series of papers. Buyers sign a promissory note, their agreement to repay the mortgage loan, detailing the amount, interest rate, and payment schedule. They also sign a mortgage or deed of trust, which secures the lender’s interest in the property if the borrower defaults.

The seller signs the deed, which legally transfers ownership to the buyer. Other documents, such as affidavits confirming property condition or absence of liens, are also signed. Individuals should ask questions about any document they do not fully understand before signing.

Following the signing, funds are exchanged. The buyer’s certified funds and disbursed loan funds from the lender are transferred to the closing agent or title company. These funds are then distributed to the seller, covering the sale price, and used to pay off existing mortgages or liens. Remaining closing costs and fees, such as title insurance premiums, recording fees, and escrow fees, are also settled from these funds.

A notary public verifies the identity of each signer using government-issued photo IDs. They witness each signature, ensuring documents are signed willingly and without duress. After witnessing, the notary affixes their official seal, authenticating the documents and making them legally binding and recordable. This prevents fraud and ensures transaction integrity.

A review and distribution of all executed documents occurs. Copies of all signed paperwork, including the deed and mortgage documents, are provided to the buyer and seller for their records. The closing agent also prepares the original documents for official recording with the county.

Post-Closing Actions

After the closing meeting concludes, several immediate actions finalize the transition into or out of the property. These steps ensure the new owner gains full possession and all legal and practical aspects are addressed.

Receiving the keys and taking possession of the property is a post-closing action for buyers. The exact timing can vary. Keys may be handed over immediately after all documents are signed and funds are officially disbursed to the seller. However, delays can occur if loan funding or the recording of the deed takes additional time, sometimes extending to the next business day. The purchase agreement may also specify a particular possession date, which could be later than the closing date.

The deed, which formally transfers ownership, must be recorded with the local county recorder’s office. This legal step updates public records to reflect new ownership. While typically handled by the closing agent or title company, its recording establishes clear title and protects the buyer’s ownership rights.

Buyers should securely store all closing documents, including the Closing Disclosure, promissory note, mortgage or deed of trust, and the recorded deed. These documents serve as proof of ownership, loan terms, and a record of financial transactions. Keep them in a safe place, such as a fireproof safe or a secure digital backup, for future reference, tax purposes, or if any legal issues arise.

New homeowners transfer utilities into their name, including essential services such as electricity, water, gas, and internet. Contacting utility providers a few days before or immediately after closing helps ensure a seamless transition of services without interruption.