Real Estate Closing: What to Expect

Closing is the final step in buying or selling a home, when the money changes hands, the deed is signed, and the buyer gets the keys. Knowing what happens ahead of time makes it far less stressful.

Before closing day

• Title search and title insurance. The title company or attorney checks public records for liens, unpaid taxes or ownership problems that must be cleared before the sale.
• Closing Disclosure. If you have a mortgage, your lender must give you this form at least three business days before closing. It lists your final loan terms and closing costs. Compare it carefully with the Loan Estimate you got earlier and ask about anything that changed.
• Final walk-through. The buyer checks that the home is in the agreed condition and any promised repairs were made.
• Wire the funds safely. Closing-day wire fraud is common. Confirm wiring instructions by calling the title company or attorney at a number you already know, never one from an email.

At the closing table

Buyers sign the promissory note, the mortgage or deed of trust, and many disclosures. Sellers sign the deed transferring ownership. The person running the closing makes sure the money is distributed correctly: paying off the seller's old loan, the agents' commissions, taxes and fees.

Typical closing costs

Buyers usually pay lender fees, title insurance, recording fees and prepaid taxes and insurance. Sellers usually pay their agent's commission and any transfer tax, though this varies by state and can be negotiated.

Where a real estate attorney fits in

In some states an attorney must handle or be present at closings; in others a title or escrow company runs the process. Even where it is not required, an attorney is worth considering when:

• The title search turns up a problem.
• You are buying or selling without an agent.
• The deal involves an estate, a divorce, a short sale or a property with tenants.
• You are buying commercial property or land.

See do you need a real estate attorney for more.

Find a real estate attorney near you if your closing has any of these complications.

This guide is general information, not legal advice. Closing practices differ by state.