Closing Checklist

What Is a Real Estate Closing?

Closing on a property represents one of the most significant financial transactions you’ll make in your lifetime. Whether you’re purchasing your first rental property or adding another investment to your portfolio, the closing process involves numerous steps, documents, and deadlines that require careful attention and organization.

Real estate closing, also called settlement or escrow, is the final step in a property purchase transaction. During closing, ownership officially transfers from the seller to the buyer, funds exchange hands, and all necessary legal documents are signed and recorded.

The closing process typically takes 30 to 45 days from the time your offer is accepted, though timelines vary based on financing type, property condition, and local requirements. Understanding what happens during this period helps you prepare adequately and avoid last-minute surprises.

Pre-Closing Preparation Checklist

Secure Your Financing

Once your offer is accepted, immediately begin working with your lender to finalize your mortgage. Submit all requested documentation promptly, including pay stubs, tax returns, bank statements, employment verification, and asset documentation.

Respond quickly to your lender’s requests to avoid delays. Most lenders require multiple rounds of documentation, so stay organized and keep copies of everything you submit. Your lender will order an appraisal to verify the property’s value meets or exceeds your purchase price.

Schedule Property Inspection

Hire a qualified home inspector to evaluate the property’s condition within your inspection contingency period, typically 7 to 10 days after contract acceptance. The inspector will examine the structure, roof, foundation, plumbing, electrical systems, HVAC, and other major components.

Attend the inspection if possible to ask questions and understand any issues firsthand. Review the inspection report carefully and identify items that need repair or further evaluation by specialists. Use inspection findings to negotiate repairs with the seller or request credits toward closing costs.

Order Title Search and Title Insurance

Your lender will require a title search to confirm the seller has clear ownership and the legal right to sell the property. The title company examines public records to identify liens, judgments, easements, or other encumbrances that could affect your ownership.

Purchase an owner’s title insurance policy to protect against title defects discovered after closing. Your lender will require lender’s title insurance, but owner’s coverage protects your investment. Review the preliminary title report carefully and address any issues before closing.

Review Homeowners Association Documents

If you’re purchasing a property in a homeowners association, carefully review all HOA documents during your contingency period. Request the CC&Rs (Covenants, Conditions, and Restrictions), bylaws, budget, meeting minutes, reserve study, and rules and regulations.

Pay special attention to monthly fees, special assessments, restrictions on rentals (if you’re buying an investment property), pending litigation, and reserve fund levels. Some associations have strict rental restrictions that could impact your investment plans.

Obtain Homeowners Insurance

Shop for homeowners insurance and obtain quotes from multiple providers. Your lender requires proof of insurance before closing, typically showing coverage equal to the loan amount or replacement cost of the property.

Finalize your policy at least one week before closing and provide your insurance agent with the closing date and lender’s contact information. The agent will send the insurance binder directly to your lender. Consider additional coverage options like flood insurance, earthquake insurance, or umbrella policies based on your property’s location and risk factors.

Schedule Final Walk-Through

Schedule your final walk-through inspection for 24 to 48 hours before closing. This inspection allows you to verify the property’s condition matches the terms of your purchase agreement and that any negotiated repairs were completed satisfactorily.

During the walk-through, confirm all systems are operational, agreed-upon repairs are complete and properly done, the property is in the same condition as when you made your offer, fixtures and appliances included in the sale remain, and the property is clean and vacant (unless otherwise agreed).

Document Review Checklist

Review Closing Disclosure

Your lender must provide the Closing Disclosure at least three business days before closing. This document outlines your final loan terms, closing costs, and cash needed to close. Review it carefully and compare it to your initial Loan Estimate.

Verify the loan amount, interest rate, monthly payment, and closing costs match your expectations. Check that your name and the property address are correct, confirm the loan term and type, and identify any prepaid expenses or escrow requirements.

Contact your lender immediately if you notice errors or significant changes from your Loan Estimate. Some changes may require a new three-day waiting period before you can close.

Understand Your Closing Costs

Closing costs typically range from 2% to 5% of the purchase price and include various fees and expenses. Common closing costs include loan origination fees, appraisal fees, title insurance, title search fees, attorney fees, recording fees, transfer taxes, prepaid property taxes and insurance, and survey costs.

Some costs are negotiable, and you may have negotiated for the seller to pay a portion of closing costs in your purchase agreement. Review each line item on your Closing Disclosure to understand what you’re paying for.

Review the Settlement Statement

The settlement statement, also part of your Closing Disclosure, shows all financial transactions related to the sale. It details the purchase price, earnest money deposit, seller concessions, prorated property taxes and HOA fees, and final cash needed from you.

Verify all credits and debits are accurate and match your purchase agreement. Confirm your earnest money deposit appears correctly and check that any agreed-upon seller credits or concessions are included.

Gather Required Identification

Bring a valid government-issued photo ID to closing, such as a driver’s license or passport. The title company or attorney must verify your identity before you sign documents. If you’re closing with a co-buyer, each person needs proper identification.

Week Before Closing Checklist

Confirm Closing Date, Time, and Location

Contact your real estate agent or closing agent to confirm the exact closing date, time, and location. Closings typically occur at the title company office, attorney’s office, or lender’s office. Plan to arrive 10 to 15 minutes early and allow at least one to two hours for the closing process.

Arrange Funds Transfer

Contact your bank to arrange the wire transfer or cashier’s check for your down payment and closing costs. Personal checks are typically not accepted for amounts over a certain threshold. Get wiring instructions directly from the title company and verify the information by phone to protect against wire fraud.

Schedule the wire transfer to arrive at least one business day before closing to ensure the funds clear on time. If using a cashier’s check, obtain it no more than a few days before closing, as some have expiration dates.

Do Not Make Major Financial Changes

Avoid any significant financial transactions before closing. Do not open new credit accounts, make large purchases, change jobs, move money between accounts without documenting it, or co-sign loans for others.

Lenders verify your financial status right up until closing, and major changes can delay or derail your loan approval. Even inquiries on your credit report can impact your approval, so postpone major financial decisions until after closing.

Complete Utility Transfers

Arrange to transfer utilities into your name effective on the closing date. Contact providers for electricity, gas, water, sewer, trash collection, internet, and cable. Some utilities require deposits, especially for new accounts.

Ask the seller or your agent for current utility provider information and account numbers. Schedule service start dates to align with your closing date to ensure uninterrupted service.

Pack Important Documents

Gather all documents you’ll need at closing and keep them in a secure folder. Include your government-issued ID, proof of homeowners insurance, proof of funds transfer confirmation, inspection reports (if relevant to repairs), and the purchase agreement.

Your closing agent will provide most documents you need to sign, but having your copies helps you follow along and reference specific terms if questions arise.

Day of Closing Checklist

Arrive Prepared

Arrive at closing on time with all required documents and identification. Bring a pen, though most closing agents provide one, and a folder or bag for the numerous documents you’ll receive. Dress comfortably, as you’ll be sitting and signing documents for one to two hours.

Review Documents Before Signing

The closing agent will present numerous documents for your signature. Take your time to review each document and ask questions about anything you don’t understand. Key documents include the promissory note, mortgage or deed of trust, closing disclosure (final review), deed, bill of sale, and affidavits.

You have the right to understand every document you sign. Don’t let anyone rush you through this process. If something appears incorrect or different from what you expected, speak up immediately before signing.

Verify All Numbers

Before signing, verify critical numbers one last time. Confirm the loan amount, interest rate, monthly payment, total closing costs, cash paid at closing, and property taxes and insurance amounts.

Check that prorations for property taxes, HOA fees, and utilities are calculated correctly. These prorated amounts should reflect who owned the property during different portions of the month or year.

Sign Documents Carefully

You’ll sign dozens of documents during closing. Sign your name consistently exactly as it appears on your identification and loan documents. If you notice your name is misspelled on documents, notify the closing agent immediately to make corrections.

Initial where indicated and read any disclosures or acknowledgments carefully before signing. Some documents require notarization, and the closing agent or a notary public will witness your signatures.

Receive Your Keys

After all documents are signed and funds are verified, you’ll receive the keys to your new property. You may also receive garage door openers, access codes, mailbox keys, and other access devices. Ask about any security system codes or smart home access credentials.

Confirm you have all keys and access devices before leaving the closing. Test the keys if possible to ensure they work properly.

Post-Closing Checklist

Store Documents Securely

Keep all closing documents in a safe, secure location. Important documents to retain permanently include the deed, title insurance policy, closing disclosure, promissory note, mortgage or deed of trust, and survey.

Consider storing original documents in a fireproof safe or safety deposit box. Keep digital copies as backup in secure cloud storage or on an encrypted external hard drive.

File Your Deed

Verify that your deed is recorded with the county recorder’s office. Your closing agent typically handles recording, but confirm this happens within a few days of closing. Recording establishes public record of your ownership and protects your legal rights to the property.

Request a recorded copy of your deed for your records once recording is complete. This document proves your ownership if questions arise in the future.

Set Up Mortgage Payment

Confirm how and when to make your first mortgage payment. Your first payment typically isn’t due until 30 to 45 days after closing. Set up automatic payments through your lender’s online portal to avoid missed payments.

Review your mortgage statement when it arrives to verify the principal, interest, property taxes, insurance, and any other amounts match your closing documents. Contact your lender immediately if you notice discrepancies.

Update Your Address

Notify relevant parties of your address change, including the post office (file change of address), employer, financial institutions, insurance companies, credit card companies, voter registration, vehicle registration and driver’s license, and subscription services.

Forward mail from your previous address for at least a few months to catch any correspondence you might have missed.

Create Property Maintenance Records

Start a property maintenance file to track all repairs, improvements, and routine maintenance. Document warranty information for appliances and systems, service provider contacts, maintenance schedules for HVAC, water heater, etc., and receipts for repairs and improvements.

These records prove valuable for future tax purposes, resale value, and warranty claims. They also help you maintain the property properly and plan for future expenses.

Review Property Taxes

Understand your property tax obligations and payment schedule. Your property taxes may be included in your monthly mortgage payment through an escrow account, or you may pay them directly to the tax collector semi-annually or annually.

If your taxes are escrowed, verify your lender has the correct tax information. After closing, you may receive a supplemental tax bill if your purchase price exceeded the previous assessed value, particularly in states that reassess property upon sale.

Common Closing Mistakes to Avoid

Even experienced buyers make mistakes during the closing process. Avoid these common errors to ensure your transaction proceeds smoothly:

Missing the Final Walk-Through: Always conduct a final walk-through to verify the property’s condition and ensure repairs are complete. Discovering problems after closing makes resolution much more difficult.

Not Reading Documents Carefully: Never sign documents you don’t understand. Ask questions and take your time reviewing everything, even if it delays closing slightly.

Making Large Purchases Before Closing: Buying furniture, cars, or other big-ticket items before closing can change your debt-to-income ratio and jeopardize your loan approval.

Forgetting to Get Keys and Access Codes: Don’t leave closing without all keys, garage openers, security codes, and access information. Tracking down these items later causes unnecessary hassle.

Not Verifying Wire Instructions: Wire fraud is increasingly common. Always verify wiring instructions by calling the title company at a known phone number before transferring funds.

Failing to Budget for All Costs: Remember you’ll need funds beyond closing costs, including moving expenses, immediate repairs or improvements, utility deposits, and furniture or appliances.

Tips for a Smooth Closing

Preparation and organization are key to a successful closing. These tips help ensure your transaction proceeds without complications:

Communicate Frequently: Stay in regular contact with your real estate agent, lender, and closing agent. Respond promptly to requests for information or documentation.

Keep Digital and Physical Copies: Maintain copies of all documents throughout the process, both digital and physical. Organization saves time and reduces stress if questions arise.

Budget Conservatively: Expect closing costs and move-in expenses to be higher than estimated. Having extra funds available prevents last-minute scrambling.

Clear Your Schedule: Don’t schedule important commitments immediately after closing. Unexpected delays can push your closing time back several hours.

Bring Support If Needed: If you’re nervous about the closing process, bring your real estate agent or a trusted advisor who can help you understand documents and advocate for your interests.

Review Your Loan Terms One More Time: Before closing, review your loan terms to ensure you understand your payment obligations, prepayment penalties (if any), and escrow requirements.

Closing Checklist Takeaways

Closing on a property involves many moving parts, but following this comprehensive checklist keeps you organized and prepared throughout the process. While the paperwork may seem overwhelming, remember that each document serves a purpose in protecting your interests and ensuring a legal transfer of ownership.

The key to a successful closing is preparation, communication, and attention to detail. Start preparing early, stay organized, ask questions when you don’t understand something, and work closely with your real estate team to address issues promptly.

By following this checklist, you’ll approach your closing day with confidence, knowing you’ve covered all necessary steps and prepared for this exciting milestone. Whether you’re buying your first property or your tenth, thorough preparation ensures a smooth closing and sets the stage for successful property ownership.

Remember that your real estate agent, attorney, and closing agent are there to help you through this process. Don’t hesitate to reach out to them with questions or concerns at any stage. A successful closing marks the beginning of your property ownership journey, and proper preparation ensures you start on the right foot.