4. Request property insurance quote
Once the inspection has been ordered, the next step is to request a quote for property insurance. Many insurance providers will use information from the property inspection to prepare their quote or possibly deny coverage based on findings from the inspection, so it's important to shop around for a competitive quote with an insurance agent immediately after your inspection has been ordered or completed.
5. Get the lender-ordered appraisal (if a lender is being used)
If the buyer is getting a traditional mortgage through a bank or lending institution, the lender will order an appraisal. An appraisal ordered by the buyer or seller will not be accepted by the lender. The appraisal needs to come in at the contract price or higher. If the appraised value is less than the sales price, the sales price will need to be lowered to reflect the appraised value.
6. Renegotiate terms or request repairs (if needed)
If anything is discovered from the title search, inspection, or appraisal that significantly alters the original terms of the contract, the buyer can attempt a renegotiation such as extending the closing date, requesting repairs from the seller, or asking for a concession, which is a credit given by the seller to the buyer at closing. The seller can agree to these changes or allow the buyer to exit the contract without penalty as long as this is done within the inspection period.
7. Choose a closing date and review closing paperwork
Once the appraisal, inspections, title search, and terms of the contract are approved and completed, the closing agent will coordinate a closing date with the buyer, seller, and lender (if being used). The escrow agent will send the closing paperwork to both parties prior to closing to review for accuracy.
If the buyer is getting a mortgage, a few days before closing the lender will re-run the buyer's credit and lock in the interest rate for the loan. Once confirmed, the lender is required to send the buyer a TILA-RESPA Integrated Disclosure (TRID) -- which discloses and explains the cost for closing and financing -- at least three days prior to closing.
8. Conduct final walk-through
A day or two before closing, buyers can conduct their final walk-through to ensure no alterations other than what has been agreed upon in the contract have been made.
9. Execute closing documents on closing day
Closings can happen face to face in the office of the title company or real estate attorney or, depending on the state, as a mail-away closing where paperwork is executed outside of the closing agent's office in the presence of a notary and then returned by mail to the closing agent on or before the designated closing day. If the closing is happening face to face, the buyer and seller will meet on closing day, bringing identification and, of course, closing funds.
Since most closing agents use technology to assist in the closing process, most other required documents needed for closing, like a trust agreement or operating agreement for an LLC (often used if the buyer or seller is a trust or company), are in the hands of the closing agent before closing day.
Depending on the state and the type of property being sold, the closing package and documents can be extensive and both parties will sign a lot of paperwork. If you don't understand any of the paperwork, ask for an explanation from the closing agent or your attorney.
Once the closing documents are signed by both parties, the closing agent will record the deed, satisfaction of mortgage from the seller (if applicable), and mortgage (if applicable) in public records for the county the property is located in. The buyer is now the owner of a new home and is able to rekey the property if desired and begin moving in.
Common problems that delay closings
While closings can happen in 30 days or less, complications from title issues and title defects or delays in financing from the buyer's lender are common problems that can delay closings. Your closing agent or real estate agent should keep you up to date with how things are progressing, and it's suggested to check in with your agent every few days to ensure the process is moving forward smoothly. If complications do arise and more time is needed to close, make sure to get an extension signed by both parties and provide that to the closing agent.