Checklist Before Closing on a House: Essential Steps for a Smooth Closing

Buying a home is one of life’s most exciting (and occasionally nerve-wracking) milestones. If you’ve made it this far in the process, congratulations! You’re just a few steps away from turning that “For Sale” sign into a set of keys in your hand. But before the champagne is popped and the moving trucks roll in, you’ve got to make it to the closing table. Enter the real estate closing checklist.

Closing on a house involves a mountain of paperwork, financial coordination, and last-minute details. This isn’t the time to wing it! A real estate closing checklist ensures that nothing falls through the cracks and prevents any last-minute headaches. Think of this checklist before closing on a house as your housewarming gift from us—no bows required.

Work With Your Real Estate Agent 

Once the contract is signed, a real estate agent’s work isn’t done. A skilled agent will guide you through the complex process between opening and closing escrow. With the right real estate agent by your side, you’ll have a trusted advisor to help you every step of the way. 

Depending on if you’re the seller or buyer, they will advise you on the next steps. You may be put in touch with their transaction coordinator, who helps track all the paperwork and addendums during the inspection and due diligence period for a home sale. 

If something happens during this timeframe, the agent is also your go-to problem solver–a pipe springs a leak, the radon test comes back high, or the moving company messes up their schedule. Whatever it is, they’ll be there for you.

Review Your Purchase Agreement

Your purchase agreement (aka your sales contract) is the roadmap for the entire transaction. Scrutinize it one last time to make sure everything is in order.

• Verify the terms and conditions you agreed on, like the price, any contingencies, and their time frame.
• Pay attention to important deadlines, including the closing date. Mark important dates in your calendar or set reminders. A misstep could cost more than you expect.

Home Buyer? Do This…

Submit Your Earnest Money

Once a purchase offer is accepted, the home buyer must submit the earnest money deposit, also known as a good faith deposit. This deposit, usually 1-3% of the purchase price, is held in escrow until closing and opens the escrow account. It demonstrates the buyer’s commitment to the purchase and is applied to the down payment at closing. 

Review your contract to understand the terms of the earnest money deposit. Most contracts have a deadline of just a few days to get this money over to the escrow agent. Your real estate agent can help you submit the deposit promptly. 

This step solidifies the intent to buy and keeps the real estate transaction moving forward.

Finalize Your Mortgage

Unless you’re part of the crowd who can drop cash on a home, locking down the financing is key. Make sure all financing is squared away before closing.

• After receiving the signed purchase agreement, submit the official loan application to your chosen mortgage lender.
• Gather any necessary paperwork your lender requires, like bank statements, tax returns, or proof of funds.
• Respond to any requests for further documentation promptly.
• Confirm your final mortgage approval and underwriting are completed.
• Review the loan terms and interest rates to avoid any surprises. Check your closing disclosure for fees and costs.

Schedule a Home Inspection

The home inspection is the buyer’s opportunity to confirm that the house is in tip-top condition before you sign your name on the dotted line. A real estate agent can recommend a few certified home inspectors. Remember, your contract likely has a deadline during this due diligence period. Find someone who can do the work within your window.

A home inspector will:

• Do a visual check on the home’s structure from top to bottom. (They won’t look inside walls or pipes.)
• Test everything—appliances, plumbing, electrical systems, doors, and windows.
• Confirm the property is in the agreed-upon state. (Your dream home should never come with unexpected “surprises.”)

In some cases, you or the inspector may have additional inspections from specialists. Some may be required by your future homeowner’s insurance provider, too. Among these are:

• Pest inspections
• Pool inspections
• Chimney inspection
• Foundation inspection
• Radon testing

Requests for Remedy

Sometimes, inspections reveal safety concerns about home purchase. The contract stipulates if the buyer is buying “as-is” with no concessions or if requests for remedy can be made. If so, this opens a negotiation period between the buyer and seller. The real estate agent acts as an advisor and helps the parties find terms they can agree on, like:

• The seller will make specific repairs before closing day
• The seller will give a credit to cover the future cost of repairs
• The seller modifies the purchase price to match the loss of value

Order an Appraisal

A home appraisal is an independent evaluation of the property’s value, typically conducted by a licensed appraiser. 

Ordered by the mortgage lender, the appraisal ensures that the property’s value is sufficient to secure the loan. The appraiser will assess the property’s condition, size, location, and comparable sales in the area to determine its fair market value. The lender will review the appraisal report. Its findings may impact the loan terms or approval. 

As a buyer, reviewing the appraisal report and understanding its implications for the purchase is essential. This step ensures that you’re making a sound investment. Undervalued properties also open the door to possible price negotiations with the home seller. The lender won’t extend extra funds if the appraisal falls below the negotiated purchase price.

Purchase Homeowners Insurance & Title Insurance

No insurance? No keys. Lenders require proof of homeowners insurance before closing, so buyers must purchase a policy. Shop around for a package that gives you peace of mind without breaking the bank.

Don’t forget to purchase title insurance. It protects you from potential legal disputes surrounding ownership claims. Learn why the lender requires title insurance and why owners should buy a policy, too. 

Confirm these policies are locked in before the closing day.

Prepare The Utilities

The last thing you want on moving day is for the lights to go out while hauling a sofa up the stairs. Some utility companies run soft credit checks and require deposits, which takes time. Therefore, you should set up your new accounts before move-in day. Aim for about 1-2 weeks before closing after the due diligence period ends and the transaction appears to be moving forward.

• To make your move-in seamless, set up utilities as soon as possible. These include electrical, water, sewer, and natural gas services. 
• Change your mailing address—it’s no fun when your friends miss sending you a housewarming card.
• Remember trash and internet service, too. Some cities handle trash pickup; in other places, you’ll pay for private service. Cardboard box pick-up may be extra.

Understand Your Escrow

For those with a home loan, you’ll set up an escrow account at the closing table to manage your property taxes and insurance payments. Escrow is a separate account the lender holds to pay for these expenses on your behalf. 

Learn how your escrow account works, including how much you’ll need to pay each month and when the payments will be made. Your lender will provide you with an escrow analysis statement outlining the estimated taxes and insurance payments for the year. Review this statement carefully to ensure that you understand your escrow obligations. This knowledge helps you manage your finances effectively and avoid any unexpected costs. Some states require a buffer in the escrow account.

Are You The Seller? Your Final Days

Moving out of a home can be an emotional experience. It’s also more stressful as the deal comes down to the wire. Your steps include:

• Working with the real estate agents and the buyer’s service providers during their due diligence period. Allow these parties to inspect the home and run their independent tests.
• Negotiate on requests for remedy. It’s up to you to make any agreed-upon repairs before the closing day. The buyer may ask for proof of repair, like an invoice from the contractor or photos. It’s also likely they or their agent will verify the repairs on a final walk-through.

Otherwise, the weeks from contract to closing are more focused on preparing to move out. Here are a few steps just for you as the closing date approaches:

• Aim to keep the property in its agreed-upon condition so there are no hiccups in the final walkthrough.
• Schedule and coordinate a move-out day with your helpers or professional movers
• Pull the owner’s manuals for your home and leave them in an easy-to-find place for the new owners.
• Gather all keys and garage door openers so they don’t get packed. Label them so the new owners will easily know what goes with what.
• Notify your utility companies that your service is coming to an end. Return any equipment as per their agreement.
• Consider hiring a move-out cleaning service. Packing and moving are messy, and leaving a clean house is a courtesy to the new owners.

Closing Process Steps for Home Buyers & Sellers

Review the Closing Disclosure & Settlement Statement

Your closing disclosure is your receipt for one of the largest purchases of your life. The law requires mortgage lenders to provide this at least three business days before the closing date. Review it carefully.

• Compare the closing disclosure with your original loan estimate to ensure alignment.
• Note any discrepancies or unexpected fees—this helps avoid overpaying.
• If something doesn’t look right, don’t hesitate to ask your lender or title company for clarification.

Prepare for Closing Costs & Payments

The last thing you want is to show up without the funds ready—that would be awkward! Knowing your numbers ahead of time can save you a lot of stress.

• Calculate the total closing costs, including down payment, property taxes, title search fees, and prepaid interest.
• Arrange for the exact payment, likely via wire transfer, certified check, or cashier’s check. Your escrow agent will notify you how to make the final payment. Follow their instructions to the letter to avoid the risk of wire transfer fraud.
• Understand the ongoing costs associated with owning the home, including property taxes, homeowners’ association fees, and insurance payments.

Schedule The Final Walk-Through

Coordinate a final walkthrough with your real estate agent. This step has several purposes. First, it ensures that the property you agreed to purchase is still in the same condition as when you first saw it. Second, check that all the repairs requested in the inspection report have been completed. 

The final walkthrough is best done 1-2 days before closing, although some schedules mean you may not get one until the morning of your closing. You want at least enough time to work through any issues that arise.

Confirm All Required Documents For Closing

Triple-check that you’ve got every required document to avoid unnecessary delays as the closing date nears. Be prepared to present:

• You must provide official photo identification, such as a driver’s license, proof of homeowners insurance, and any financial documents your lender requires.
• Please review your closing disclosure and loan documents to confirm they’re correct before you sign.
• Remember the warranty information and homeownership agreements—they are your new home’s “manual,” so to speak.

Coordinate with Your Real Estate Agent & Attorney

Confirm the closing appointment with your real estate agent, lender, and title company two weeks before closing. Your real estate squad is there to make the closing process easier—keep them in the loop! Your agent and lender should provide you with a detailed checklist of what to expect and bring to the closing table. This preparation helps ensure a smooth and efficient closing and minimizes last-minute surprises.

• Confirm final meetings and ensure all closing details are understood.
• Discuss any lingering questions or concerns, from contingencies to title reviews.
• Ensure all required parties (like your attorney, if applicable) will be present at closing.
• If you’re the seller, coordinate the exchange of all house keys and garage door openers with the real estate agent. 

Sign the Closing Documents

Now, for the moment you’ve been waiting for—officially changing the hands of ownership. Signing the closing documents is crucial to a successful real estate closing. You’ll get writer’s cramp, but it’ll be worth it.

• Please review the vital documents one last time. Don’t be afraid to ask for a second to read and review.
• Sign items like the:
  • Title insurance policy
  • Official mortgage agreement
  • Escrow account
  • Property title
  • Closing disclosure
• Check for errors! Names, dates, numbers—this isn’t the time to skim.
• Once signed, verify that you will receive copies of all finalized documents for your records.

Collect the Keys & Move In!

Drumroll, please—it’s official! The closing process is now over. Time to gather those keys and get settled into your new home. Pick up the house keys, garage openers, and any access codes. The real estate agents will coordinate the transition with the prior owners. 

Most importantly, take a moment to celebrate. You did it!

Closing Thoughts

Congratulations—you’re ready to tackle the real estate closing process like a pro! You’ll set yourself up for a stress-free home purchase and avoid last-minute stress by following this closing-day checklist.

Remember, being prepared is the key to making it a positive experience, whether it’s your first foray into homeownership or your tenth. Have more questions? Reach out to your trusted real estate expert for personalized advice. Here’s to smooth closings and smoother coffee mornings in your brand-new home!