You’ve found the perfect home, made an offer, and had it accepted—congratulations! While it might feel like the hard part is over, the journey to homeownership isn’t complete just yet. The period between signing the purchase agreement and closing day is packed with important tasks that ensure everything is legally and financially in order before you officially take ownership.
From inspections and appraisals to securing financing and finalizing paperwork, understanding each step in this process can help you navigate it with confidence.
Step 1: Open an Escrow Account
Once the purchase agreement is signed, an escrow account is opened to securely hold all necessary funds and documents until closing. This neutral third party ensures that money and paperwork are properly handled to protect both buyer and seller.
- Earnest money deposit: You’ll submit an initial deposit (typically 1-3% of the purchase price) as a sign of good faith.
- Escrow management: The escrow company or attorney will oversee the transaction, ensuring all conditions are met before funds are released.
Step 2: Schedule a Home Inspection
A home inspection is a critical step to uncover any potential issues with the property before you finalize the purchase. This typically happens within a few days of signing the contract.
- What’s inspected? A professional inspector evaluates the home’s structure, electrical systems, plumbing, roof, HVAC, and more.
- Reviewing the report: If significant issues arise, you may renegotiate with the seller for repairs or price adjustments.
- Deciding next steps: You can move forward as planned, request repairs, or—if the contract includes an inspection contingency—withdraw from the deal.
Step 3: Secure Financing and Finalize Your Mortgage
Even if you were pre-approved for a mortgage, you must now go through the final approval process. Your lender will review your financials again and order a home appraisal.
- Loan underwriting: The lender verifies income, assets, and credit history to confirm you qualify for the mortgage.
- Home appraisal: The lender orders an appraisal to ensure the home’s value aligns with the loan amount. If the appraisal comes in lower than expected, you may need to renegotiate the price or cover the difference.
- Locking in your interest rate: If you haven’t already, now is the time to lock in your mortgage rate to avoid fluctuations.
Step 4: Conduct a Title Search and Obtain Title Insurance
A title search ensures the property is legally available for sale and free of liens or ownership disputes. Title insurance protects against any unforeseen claims on the property.
- Clear title verification: The title company examines historical records to confirm the seller has full ownership rights.
- Resolving issues: If any liens or claims appear, the seller must resolve them before closing.
- Title insurance: Lenders typically require title insurance to protect against ownership disputes or legal defects.
Step 5: Purchase Homeowners Insurance
Before closing, you’ll need to secure homeowners insurance, which protects your investment from damage or loss due to fire, storms, theft, and other hazards.
- Lender requirement: Mortgage lenders require proof of insurance before finalizing the loan.
- Choosing a policy: Compare coverage options, deductibles, and premiums to find the best plan for your needs.
Step 6: Review the Closing Disclosure
A few days before closing, your lender will provide a Closing Disclosure, which details the final loan terms, monthly payments, interest rate, and closing costs.
- Compare with Loan Estimate: Ensure there are no unexpected changes from your original Loan Estimate.
- Ask questions: If anything seems unclear, ask your lender for clarification before signing.
Step 7: Conduct a Final Walk-Through
The final walk-through usually occurs within 24-48 hours before closing. This is your last opportunity to inspect the home before officially taking ownership.
- Check repairs: Ensure any agreed-upon repairs were completed.
- Confirm condition: Make sure the home is in the same condition as when you made the offer, with no new damage.
- Test appliances and systems: Turn on lights, run faucets, check heating and cooling, and test appliances.
Step 8: Closing Day – Sign the Final Paperwork
Closing day is when everything becomes official! You’ll meet with your real estate agent, lender, and possibly the seller to sign the final documents and receive the keys to your new home.
- Bring identification: A government-issued ID is required.
- Prepare final payments: You’ll need a cashier’s check or proof of a wire transfer for closing costs and your down payment.
- Sign closing documents: These include the mortgage agreement, deed, and other legal paperwork.
- Receive keys: Once all funds are transferred and paperwork is complete, the home is officially yours!
The period between signing a purchase agreement and closing on a home is filled with important steps that ensure a smooth and secure transaction. From inspections and appraisals to financing and final paperwork, understanding this process will help you stay prepared and confident as you approach homeownership.
For expert guidance throughout your homebuying journey, trust Sam Kaplunov – your dedicated partner in making real estate transactions seamless and successful.
