On closing day, the ownership of the property is transferred to you, the buyer. This day consists of transferring funds from escrow, providing mortgage and title fees, and updating the deed of the house to your name.
What happens at closing? On closing day, you will have two primary responsibilities: signing legal documents and paying closing costs and escrow items. It is important to read all of these legal documents carefully so that you know exactly what you're agreeing to.
Your closing date is the day you become the legal owner of your new home.
The contract terms will determine when you can move in after closing. In some cases, it will be immediately after the closing appointment. You will receive the keys and head straight to your new home. In other situations, the seller may request 30, 45 or even 60 days of occupancy after the closing of the home.
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.
You won't receive the keys to the home until closing day, which is the last day of the closing process. This is the final day when you and the seller will meet to sign the remaining paperwork. The new deed and mortgage documents will be recorded with the county, making the sale official.
In most cases, home buyers and sellers do not meet face-to-face until their closing date. Real estate agents see a number of risks in introducing buyers and sellers, so they generally prefer to handle all of the communication until it's time to close on the home.
You and any other co-borrowers. The seller of the property or their agent. Your real estate agent and the seller's real estate agent. Real estate agents are not required to be at the closing, but may choose to attend to make sure that the closing transaction goes through.
On closing day, one of the first things you should do is pack for your move, if you haven't already. Depending on how long you've been in your current house and how many possessions you've accumulated, boxing everything up may be a Herculean task.
Both buyers and sellers typically pay closing costs, and the amount can vary depending on several factors, including the price of the home, the sort of mortgage the buyer gets, which state the home is located in and more.
Your lender is required to send you a Closing Disclosure that you must receive at least three business days before your closing. It's important that you carefully review the Closing Disclosure to make sure that the terms of your loan are what you are expecting.
Closing Day Logistics
During the closing appointment, you will sign all the legal documents and transfer funds to complete the property purchase. Once this meeting concludes and the title company or attorney confirms the home is yours, you can move in immediately.
When rent is prorated, the old owner gets the rental income through the date of closing and the new owner receives the rental income for the days remaining in that month after closing.
The final step in the financing process is to sign loan documents. These documents will take the form of a mortgage, promissory note, and/or a deed of trust depending on your market and the lender's requirements. The promissory note is the legal agreement to accept the loan.
In short, real estate agents get paid their commission when a deal is closed and closing costs are paid, and the real estate brokerage releases the agent's share of the commission payment.
How Long Does Closing Day Take? Closing day will take about 1 – 2 hours of a home buyer's time. You typically won't need more than 2 hours to tie up loose ends and certify your purchase, marking the final steps to buying a house.
Closing costs are paid according to the terms of the purchase contract made between the buyer and seller. Usually, the buyer pays for most of the closing costs, but there are instances when the seller may also have to pay some fees at closing.
Typically, the final walk-through is attended by the buyer and the buyer's real estate agent, without the seller or seller's agent present. This gives the buyer the freedom to inspect the property at their leisure, without feeling pressure from the seller.
Mortgage approvals can fall through on closing day for any number of reasons, like not acquiring the proper financing, appraisal or inspection issues, or contract contingencies.
Those present at closing will include yourself, any cosigner (if applicable), the closing agent, and your real estate agent. The seller and their agent might be in attendance, or they might close at a different time.
“When a buyer and seller meet during the transaction, it makes things messier,” admits Michele Harrington, the chief operating officer of First Team Real Estate in Irvine, CA. “If they don't get along, the negotiations become much more difficult. Both parties may start digging their heels in over little details.”
Some buyers may be able to negotiate an immediate possession date. This means as soon as the transaction is closed and the deed is recorded, the buyer can move in. A few other common buyer possession dates may be 15 days, 30 days, 60 days, or even 90 days after closing, depending on how much time the seller needs.
In our experience, Friday tends to be the most popular day of the week for clients to close. This means that your realtors and attorney will likely be busy that day, though there is nothing wrong with closing on a Friday.
Generally, keys at closing cannot be released until “funding” has taken place. Funding occurs after documents are signed and is essentially the exchanging of money. Understandably, sellers usually will not and title companies cannot release keys to the buyer until money has been transferred.