How Real Estate Closing Works

The closing process is more straightforward than most FSBO sellers expect. Here is a complete walkthrough — from signed contract to keys in hand.

Typical timeline: 30–60 days from contract to close

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Sign the Purchase Agreement

Day 1

The process begins when buyer and seller sign a legally binding purchase and sale agreement (PSA). This contract sets the sale price, earnest money deposit, contingencies (inspection, financing, appraisal), and the target closing date — typically 30–60 days out.

💡 Key tips:

· Use a state-specific PSA form from your state's real estate commission
· Include all contingencies in writing
· Buyer delivers earnest money (1–3% of price) within 3–5 days

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Open Escrow or Hire Closing Attorney

Days 1–3

Immediately after contract, open a title order with a title company or escrow company — or, if you're in an attorney state, hire a licensed real estate attorney. The title company or attorney will manage the closing from this point forward and hold the earnest money in trust.

💡 Key tips:

· Shop 2–3 title companies for rates
· In attorney states, ask for a flat-fee quote
· Provide the executed PSA to the title company immediately

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Title Search & Title Insurance

Days 3–15

The title company searches decades of public records to find any liens, encumbrances, easements, or ownership disputes that could cloud the title. They issue a preliminary title report (or title commitment) listing any exceptions. Both buyer and seller review this and resolve any issues before closing.

💡 Key tips:

· Review the preliminary title report carefully
· Sellers should clear any outstanding liens before closing
· Buyer should purchase owner's title insurance for ongoing protection

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Loan Processing & Appraisal

Days 5–25

If the buyer is financing, the lender orders an independent appraisal to confirm the home's market value supports the loan amount. The lender also completes underwriting — verifying income, employment, credit, and assets. The buyer should avoid major purchases or job changes during this period.

💡 Key tips:

· Keep all financial documents ready for the lender
· Don't open new credit accounts during underwriting
· Appraisals typically cost $400–$800

📄

Closing Disclosure Review

3+ Days Before Closing

Federal law (TRID) requires lenders to send the buyer a Closing Disclosure at least 3 business days before closing. This document shows the exact loan terms, interest rate, monthly payment, and all closing costs. Compare it carefully to the earlier Loan Estimate — any significant changes restart the 3-day clock.

💡 Key tips:

· Compare Closing Disclosure to your Loan Estimate line by line
· Question any fees that increased significantly
· You can request the settlement statement from the title company to see seller's proceeds

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Final Walkthrough

24–48 Hours Before Closing

The buyer does a final walkthrough of the property to verify it's in the agreed condition, all negotiated repairs have been made, and all included items (appliances, fixtures) are present. This is not a full inspection — it's a final verification before funds are transferred.

💡 Key tips:

· Bring a copy of the purchase agreement
· Test appliances, HVAC, and plumbing
· Document any issues immediately and contact your attorney or title company

🎉

Closing Day

Closing Date

Closing day is when title formally transfers. Buyer and seller (sometimes separately) sign stacks of documents. The buyer wires or brings a cashier's check for their closing costs and down payment. The lender funds the loan. The title company records the deed with the county. Keys are exchanged.

💡 Key tips:

· Bring valid government-issued photo ID
· Wire funds 24 hours early to avoid delays
· Seller should bring keys, garage remotes, and any HOA documents

📌 Attorney State vs Escrow State

The process above applies broadly. The key variable is who conducts the closing. In attorney states, a licensed attorney must be present. In escrow states, a title or escrow company handles everything. Check your state below.

Attorney States →Escrow vs Attorney →