What Happens at Closing?

Closing day refers to the date the home buyer and seller complete the legal transfer of the house. Once the closing process has been completed, the keys to the house are given to the buyer.

Step 1: Homeowner's Insurance Receipt
The buyer gives the lender a receipt to prove that the buyer has homeowner's insurance in place for the property. The buyer also brings a receipt for hazardous insurance to the title company if it was not sent to the lender in advance.

Step 2: Review the HUD-1 Settlement Statement
The closing agent reviews the HUD-1 settlement statement with the buyer and seller to verify that the agreed upon dollar amounts have been entered. If the information is correct, the buyer and seller sign the form.

Step 3: Present Check for Closing Costs
The buyer and the seller (if necessary) give the closing agent a certified check(s) to cover the closing costs.

Step 4: Review All Other Documents
The closing agent asks the buyer and seller to review all documents. If the documents are correct, the buyer and seller sign all remaining documents that are part of the closing process.

Step 5: Execute Mortgage Documents
The buyer reviews and signs the note and security instrument (Deed of Trust) required by the lender.

Step 6: Receive Title to the Property
A warranty deed is signed by the seller, and a copy is provided for both buyer and seller after closing.

Step 7: Receive Keys to the Property
At the conclusion of the closing process, the buyer receives the keys to the home. These keys should be temporary — it is common practice for the new homeowner to replace the locks to prevent anyone with duplicate keys from entering the home. The seller may also provide the buyer with documents, such as instructions and warranties for appliances and other major components that are part of the home.

Step 8: Record Legal Documents
The recording process is the final step in the closing process. The attorney or title company that handles the transaction completes the recording. Once the documents are recorded, the attorney or title company is notified immediately and all monies pertaining to the transaction are disbursed – including payoff(s) and seller’s proceeds.