Closing day is the culmination of weeks or even months of anticipation and preparation in the home-buying process. It’s the day when ownership of a property officially changes hands, and all parties involved gather to sign documents and complete the transaction. 

In this post, we’ll walk you through closing day, from the essential checklist to potential hiccups and the roles of buyers and sellers.

 

What Is a Closing Checklist?

Before we delve into the specifics of closing day, let’s discuss the importance of a closing checklist. This comprehensive list outlines all the tasks, documents, and details that need to be addressed before, during, and after closing. It includes items like:

      • Reviewing the closing disclosure statement.
      • Confirming the wire transfer details for funds.
      • Scheduling a final walk-through of the property.
      • Gathering all necessary identification and documentation.
      • Ensuring you have sufficient funds for closing costs.

A well-prepared closing checklist is your roadmap to a smooth closing day.

 

What Happens Before Closing Day?

If you are doing a lender financed transaction, federal regulations often require that the buyer receives the Closing Disclosure at least three business days before the scheduled closing date. It allows the buyer to review the details and compare them to the Loan Estimate received earlier in the process.

 

What Happens on Closing Day for the Buyer and Seller?

Closing day involves several key steps for both parties.


For the buyer:

      • Document Review: The buyer will go through a series of documents, including the loan agreement, closing disclosure statement, the mortgage and the promissory note. These documents outline the terms of the loan, the monthly payments, and any conditions or contingencies.
      • Payment: The buyer will provide the necessary funds for the down payment, closing costs, and other fees. This is typically done through a wire transfer or certified check.
      • Signing: After reviewing and signing all the required documents, the buyer will receive the keys to their new home. Congratulations, you’re now a homeowner!

    For the seller:

        • Property Transfer: The seller will transfer the property’s title to the buyer, usually by signing a deed. This document legally transfers ownership from the seller to the buyer.
        • Proceeds: The seller will receive the proceeds from the sale, typically through a wire transfer or a check. These funds may be used to pay off any existing mortgages or liens on the property.
        • Keys and Possession: Once the sale is complete, the seller will provide the keys to the property and give the buyer possession. The exact timing of possession transfer may vary based on the contract terms.

     

    Where Does Closing Take Place?

    Closings can occur in various locations, depending on local customs and regulations. Common venues include:

        • A closing company’s office.
        • The office of an attorney involved in the transaction.
        • A real estate agent’s office.
        • In some cases, closings can even be conducted remotely or electronically, especially in today’s digital age.

     

    How Long Does Closing Day Take?

    The duration of closing day can vary, but on average, the closing takes about thirty minutes to an hour. However, several factors can influence the length of the closing process, such as the number of documents, the complexity of the transaction, and any unforeseen issues that may arise.

     

    What Can Go Wrong on the Day of Closing?

    While closing day is highly anticipated, several issues could disrupt the process. These include:

        • Financing Delays: If the buyer’s financing isn’t secured or funds aren’t available, the closing may be delayed.
        • Document Errors: Mistakes in the documents, such as typos or inaccuracies, can slow down the process.
        • Title Issues: Title problems, like unresolved liens or boundary disputes, can delay or even jeopardize the closing.
        • Property Condition: If the property’s condition doesn’t meet the agreed-upon standards during the final walk-through, it can lead to disputes or delays.

     

    Can I Move In on Closing Day?

    The ability to move in on closing day varies based on the terms of your contract. In some cases, the buyer can take possession immediately after closing. However, discussing this with your real estate agent and clarifying the possession date in your purchase agreement is crucial. Sometimes, the buyer may need to wait until the seller fully vacates the property.

     

    What Is the Best Day to Do a Closing? And the Worst?

    The best and worst days for closing can be subjective and depend on various factors, including your personal schedule and the real estate market. Many buyers prefer closing at the end of the month to minimize interest payments, while others choose Fridays for convenience. The worst days could be holidays or weekends when banks and offices may be closed, potentially causing delays.

     

    Closing day is a significant milestone in the homebuying process, representing the culmination of your efforts to secure your dream home. By understanding what to expect, being prepared with a checklist, and addressing potential challenges proactively, you can ensure a smoother closing day experience and look forward to the exciting journey of homeownership.