What Happens the Week Before Closing on a House?
Understand the vital final steps and preparations in the week leading up to closing on your house for a successful home purchase.
The week leading up to a home closing is a time for buyers and sellers to address final details and confirm all arrangements are in place. This period requires careful coordination to ensure a smooth conclusion to the home buying process.
Confirming Readiness for Closing
The final walkthrough occurs 24 to 48 hours before closing. This inspection allows the buyer to confirm the property is in the agreed-upon condition, free of new damage, and that any negotiated repairs have been completed. Buyers should check that all fixtures and personal property included in the sale remain, and that any items the seller agreed to remove have been cleared. During this visit, test major appliances, flush toilets, run water, and check electrical outlets to ensure everything is functioning properly.
Review the Closing Disclosure (CD), provided at least three business days before closing. This document details final loan terms, projected monthly payments, and total closing costs. Buyers should compare the CD against the initial Loan Estimate, checking interest rates, loan amounts, and all fees. Any discrepancies, such as unexpected charges or missing credits, should be brought to the attention of the lender or closing agent for clarification and correction. This three-day review period is a federal requirement, allowing for error identification before signing.
Buyers must ensure all last-minute conditions are met. This includes providing proof of homeowners insurance, a requirement by lenders to protect their investment. Buyers should have their insurance policy active and binder provided to the lender prior to closing. Initiate utility transfers, such as electricity, water, and gas, into the buyer’s name for the day of closing to ensure seamless service.
Financial Finalizations
Wire the remaining funds required to complete the purchase, including the down payment and any remaining closing costs not covered by the loan. Buyers receive specific wiring instructions from their closing agent or attorney, which must be followed precisely. Verify these instructions through a separate, secure method, such as a phone call to a known number for the closing agent, as wire fraud attempts are common.
Initiate the wire transfer one to two business days before closing to ensure funds clear and are available by the closing date. Banks may have daily wire limits or cut-off times, so plan ahead to avoid delays. Confirm with the bank that the transfer was successful and that the funds were received by the closing agent. This helps prevent last-minute issues that could delay the closing.
Lenders conduct final checks before issuing the “clear-to-close” status. This includes verifying employment and reviewing the buyer’s credit report for new debts. Buyers should avoid making large purchases, opening new lines of credit, or changing employment during this period. Changes to financial circumstances or credit profiles could jeopardize loan approval. The underwriter confirms all loan conditions have been satisfied, ensuring the loan meets all guidelines.
The Closing Day
On the day of closing, all parties meet at a designated location, such as the closing agent’s office, an attorney’s office, or a title company. Attendees include the buyer, seller, closing agent or attorney, and real estate agents representing both sides. This meeting facilitates the final signing of documents and the official transfer of ownership.
Many documents require signatures from both the buyer and seller. For the buyer, these documents relate to the mortgage loan, including the promissory note and the mortgage or deed of trust. Other documents include affidavits, disclosures, and settlement statements. The seller signs the deed, transferring ownership, and other affidavits related to the property’s condition and liens.
Once documents are signed, the closing agent disburses funds according to the Closing Disclosure. This involves transferring loan proceeds from the lender and the buyer’s wired funds to the seller, and paying closing costs. With funds disbursed and the deed recorded, ownership transfers from seller to buyer. The keys to the property are then handed over, concluding the home purchase.