Learn · Buying & Selling
Understanding the Closing Process
What happens between accepted offer and keys in hand — and how to make sure nothing goes wrong.
"Closing" refers to the final stage of a real estate transaction — the moment ownership legally transfers from seller to buyer. It's also where most deals fall apart if not managed carefully. Understanding every piece of the process removes the stress and keeps you in control.
The Closing Timeline
Offer accepted
The purchase contract is signed by both parties. The clock starts.
Earnest money deposited
The buyer wires or delivers earnest money to the escrow/title company. It's held until closing.
Inspection period
Buyer schedules and completes all inspections. Repair requests or credits are negotiated.
Mortgage processing
Lender orders appraisal, verifies documents, underwrites the loan.
Title search
Title company verifies the seller has legal right to sell and checks for liens or encumbrances.
Closing Disclosure issued
Lender must provide final loan terms and itemized closing costs at least 3 business days before closing. Review every line.
Final walkthrough
Buyer confirms the home is in agreed-upon condition. Check that agreed repairs were made.
Sign and fund
All parties sign documents, funds are wired, deed is recorded, keys are handed over.
What Are Closing Costs?
Closing costs are fees paid to complete the transaction. Buyers typically pay 2–5% of the purchase price; sellers typically pay 1–3% (without an agent, much less).
Buyer pays
- Loan origination fee (0.5–1%)
- Appraisal fee ($500–$700)
- Title insurance — lender's policy ($500–$1,500)
- Prepaid homeowner's insurance (1 year upfront)
- Prepaid property taxes (2–6 months into escrow)
- Attorney or closing agent fees ($500–$1,500)
- Recording fees ($50–$250)
Seller pays
- Title insurance — owner's policy ($500–$1,500)
- Transfer taxes (varies by state/county)
- Outstanding liens or HOA fees
- Attorney fees ($500–$1,000)
- Any agreed-upon buyer credits or repairs
- Prorated property taxes for the year
What Can Delay or Kill a Closing
- Financing falls through — buyer's loan is denied after underwriting. Always have a financing contingency.
- Low appraisal — home appraises below purchase price. Buyer and seller must renegotiate or deal dies.
- Title issues — undisclosed liens, estate disputes, or boundary problems found during title search.
- Inspection disputes — buyer and seller can't agree on repairs or credits.
- Last-minute changes to buyer's finances — new car purchase, job change, or large deposit before closing can trigger a denial.
- Buyer doesn't complete walkthrough — condition issues found at closing are harder to resolve.
Closing Without an Agent
Without agents, closing is actually simpler — fewer parties, less miscommunication. You will need:
- A real estate attorney to prepare or review the purchase contract and represent you at closing
- A title company or closing attorney to handle the title search, escrow, and deed recording
- A lender (if financing) who will coordinate the appraisal and loan documents
- Homeowner's insurance binder from your insurer, ready before closing