What Happens at Your Real Estate Closing?

You found your perfect new home. You found a mortgage lender. You made an offer to buy the home. The seller accepted your offer. The house passed all necessary inspections. Now what? When does your new home actually become yours?

The answer is at closing. As the Home Buying Institute explains, closing is the final step of your home buying process. Many important things happen at this meeting, and money and legal documents change hands.

Closing Specifics

With the escrow agent acting as facilitator, the steps to your closing consist of the following:

• You give the escrow agent a cashier’s check in the amount of your closing costs.

• Your mortgage lender’s representative gives the escrow agent a check in the amount of your mortgage loan if this step has not already taken place.

• The escrow agent gives the seller a check in the amount of that portion of the home’s purchase price to which he or she is entitled.

• The seller signs the warranty deed and gives it to the escrow agent.

• The escrow agent gives the signed warranty deed to you or, more likely, to the representative from the title insurance company who records it in your county’s Recorder of Deeds Office before bringing or mailing it back to you.

Closing Costs

You can expect your closing costs to total somewhere around 3% of the amount of your mortgage loan. Your mortgage lender will provide you with a Good Faith Estimate of them, followed by an itemized HUD-1 Settlement Statement once all closing costs become known and totaled. This is the amount for which you must obtain a certified check from your bank to present to the escrow agent at closing.