Closing on a house is one of the most exciting days of the home buying process. It’s undoubtedly one of the most celebratory! After all, you’ve gone through many processes of the offer letter, inspections, and mortgage preparation to get to this grand finale. But that doesn’t always mean it’s smooth sailing from here. There are many moving parts, legal paperwork, and funding to be exchanged.
If you’re a first-time home buyer or a pro, there’s no need to be anxious. With our guide to closing on a house, prepare for what happens on closing day for buyers to ensure you have a happy home closing day.
What is closing day?
Closing on a house means you will take ownership of the property. Closing day is the official date on which the ownership of the house, or the title, transfers from the seller to the buyer.
In a traditional home sale, closing day typically occurs four to eight weeks after the offer is accepted. However, new construction homes may have longer timelines based on the construction status of the home you’re buying.
Closing on a house is usually managed by an escrow agent, who may also be a closing attorney and expert in real estate closing and documents.
What happens on closing day for buyers?
On closing day, the property will be transferred to the buyer, you. This will include moving funds from escrow, paying mortgage and title fees, and updating the deed for the home with your name. You (and the seller) will sign stacks of paperwork to make the transfer of ownership official. Closing on a house means you have sealed the deal!
PREPARING FOR CLOSING DAY
Remember to consult directly with your team of real estate professionals (your real estate agent, mortgage lender, and insurance broker) before the day of closing on a house to guarantee that you are fully equipped to complete a seamless closing day with no surprises.
Leave early to avoid traffic or unexpected mishaps, like commute delays or vehicle trouble. The office will likely have many homeowners closing on a house on the same day, and you don’t want to delay or be forced to re-schedule.
Free your calendar for at least two hours. Closing on a house typically takes 1-2 hours but can take longer in unexpected circumstances.
WHAT TO BRING WHEN CLOSING ON A HOUSE
You’ll be prepared for what happens on closing day for buyers if you bring all of your necessary paperwork. Keep the paperwork clean and organized in a file folder or envelope for safekeeping during your closing.
Closing day paperwork includes:
- Contract and closing documents for reference
- Government-issued photo ID for each person who has their name on the mortgage or title
- Proof of home insurance
- Cashier’s check, certified check, or wire transfer information for final funds and closing costs
After closing on a house, you may want to give your agent a token of appreciation or a nice note or purchase a card for the sellers.
REVIEW PAPERWORK CAREFULLY BEFORE AND ON CLOSING DAY
You’ll have a preview of what happens on closing day for buyers when you receive your closing disclosure documents three days before closing on a house. Legally, you should be provided these documents early to review them and gather any questions or concerns before signing the official closing day paperwork.
Look closely at the paperwork to verify your name, numbers, addresses, and all other information is accurate and that there are no errors. Minor mistakes can result in more significant problems later and may delay your ability to finish closing on a house. You may notice some slight changes in fees, but make your agent aware if there are any new, large amounts.
Remember that stack of papers we mentioned? Well, what happens on closing day for buyers is they’re required to sign a collection of vital paperwork to finalize the sale. These documents include the following:
- Property deed
- Bill of sale
- Transfer tax declarations
- Closing disclosure
- Mortgage note
- Loan application
Closing Day FAQs
Do people move in on the day of closing?
Many homeowners choose to move in on closing day, but there are some scenarios when it doesn’t happen. For example, if the home isn’t ready for move-in due to renovations, the house remains occupied by the sellers for any given reason, or the homeowners simply aren’t prepared to move in that day. We do not recommend arranging movers and shipments on closing day in case of delays in the closing process.
Can a loan fall through on closing day?
Unless you’re a cash buyer, closing on a house can fall through on closing day due to mortgage loan issues. Though it’s rare (73% of contracts close on time, and only 5% of contracts never make it past closing day), there are also other reasons that a home’s sale can fall through on the closing day, including cold feet, title issues, and unfulfilled contingencies. To avoid these, it’s important to stay involved and prepared for what happens on closing day for buyers.
What to do the day after closing?
Once you’ve finished closing on a house, it’s officially yours. You can now enjoy your home and rest after all the hard work that got you there! After the closing day, you will likely receive more paperwork from your mortgage company, HOA, or property tax authority. It’s helpful to keep a new file with your closing day paperwork and all newly-acquired paperwork on your new house.
Do you feel ready for closing on a house now? You should be excited and proud to have made it to this point in the home buying process! Thanks to your preparation and research into what happens on closing day for buyers, you’ll be more confident and comfortable waltzing into the closing day office.