You’re preapproved for a mortgage, you’ve picked out the perfect property, and your offer is accepted. You’re so close to closing on your home that you’ve put the champagne on ice. But before popping any champagne bottles, you need to know what happens on closing day when buying a home. 

We’re here to help prepare you for what is involved in the closing process, what to expect on closing day, and what you need to bring on the big day.

What is a closing? When does it happen?

When you buy a home, the last step in the process is called the closing. Your title company will work with you to determine the closing date and time—or the date when you finalize all the details of the transaction and you become a legal owner of the home. 

Closings typically happen 4-6 weeks after you sign the sales and purchase contract, though it could take longer. This allows enough time for home inspections, home appraisals, funding, and title searches to clear.

The closing day itself may take several hours as you complete all the final paperwork.

Who attends the closing?

In some areas of the country, the buyer and seller sit down together at closing. In other areas, you won’t even see the seller, as you’ll have separate appointments. And today, many closings are happening remotely, with notaries being dispatched to hotels, offices or a location of choice by the buyer.

The closing agent is usually a title officer or an attorney. It will be a neutral third party to ensure everything is completed correctly. The buyer and the seller will agree on the closing/settlement agent at the time the offer is accepted by both parties.

As far as who typically attends on closing day, when buying:

• All homebuyers
• Attorney, if you’re using one
• A lender’s representative
• Your real estate agent
• Title agent/notary public

When you’re selling a home, the following may attend:

• Home sellers
• Seller’s attorney, if they’re using one
• The seller’s representative
• Seller’s real estate agent
• Title agent/notary public

What happens on closing day, and what you’ll need to bring

Most of what you’ll need on closing day will be provided to you, but there are a few items you’ll need to bring, too, including:

• Witnesses – Be sure you check with your notary in advance to determine if you’ll need to bring any witnesses with you on closing day. Some documents may require a second witness. If so, the witness must be over 18 years of age, and they cannot be a family member.
  
• Final walkthrough – On closing day, you’ll do a final walkthrough with your realtor to make sure that what you put an offer on is what you’ll get. With 30-45 days typically standing between when you make an offer and when you receive the keys, a lot can happen. Your realtor will typically have a checklist on what to review, including cabinets, lights, fixtures, appliances and more. Be sure to do the final walkthrough before signing your closing paperwork.
  
• Valid Photo ID – You’ll need a government-issued identification, like a driver’s license or passport, so the title company can verify your identity. Be sure your identification is not expired and the name on the identification matches the name on the paperwork. 

• Cash to close – On closing day, you’ll need to pay for closing costs, the down payment, prepaid interest, property taxes and insurance during the closing. This is also known as your cash to close, or the total amount you will need to bring to close your mortgage loan. The title company will only accept funds via wire transfer. Make sure to doublecheck wiring instructions with the title company, via phone, before sending to ensure your hard-earned money ends up in the right place.
  
• Proof of homeowners insurance – Before your lender will approve you for a mortgage loan, they’ll require you to take out a homeowners insurance policy. You can use the policy’s declarations page as proof of insurance.
  
• Closing Disclosure – The Closing Disclosure form lists the final terms and costs of your mortgage loan. This shows the loan amount, interest rate and monthly payment, including a breakdown of how much of your payment is made up of principal, interest, private mortgage insurance (if applicable), property taxes and homeowners insurance. It will also clearly identify the exact money you’ll need on closing day.

How much should you save for closing costs?

Closing costs typically make up to 3-6% of the home’s cost. Closing costs are separate from, and in addition to, your down payment. Closing costs cover the appraisal, title insurance, application fees and more.

Depending on the market you’re buying a home in, you may be able to negotiate for the seller to pay for a portion of your closing costs. Bear in mind this typically only happens in a buyer’s market. In seller’s markets, like right now, and the seller receives multiple offers, asking the seller to cover closing costs would likely result in losing the bid.

Getting to closing day was undoubtedly a long process, but be sure to stop and enjoy the moment. It’s the day you officially bought a home, an endeavor in and of itself.

Now pop that bottle of champagne.

‍