What Are the Steps in Closing on a House?

Closing on a house can be the most challenging part of the home-buying process.
Closing on a house can be the most challenging part of the home-buying process. (Image: Photos.com/Photos.com/Getty Images)

Purchasing a house can be a very exciting and daunting task. Once you find a real estate agent, there are still endless homes to look at, questions to ask and negotiations to be made. If you have found your dream home, and the owner has accepted your offer, you’re halfway there, but there are a few more big steps involved before you close on your house.

Hire a settlement agent. This should be your first step, because the settlement agent makes sure all of the details are taken care of before the official closing date. Your real estate agent or mortgage broker can recommend someone, but be sure to shop around, as fees can vary.

Perform a title search. Your settlement agent will arrange to have the title search performed. This is important in determining whether there are any liens on the property -- something that could hold up the closing. If you are getting a mortgage, you will most likely need title insurance.

Have the home inspected. A home inspection isn’t always required, but it is always a good idea. A licensed home inspector can uncover deficiencies that might otherwise be overlooked. If the inspection reveals any major problems, you may wish to have the seller take care of them before the closing. In addition to the official home inspection, it's always smart to have another informal walk-through inspection the day before the closing. This ensures that everything that was supposed to be taken care of has been and that your home is ready on closing day.

Obtain insurance and a home warranty. You will want to purchase homeowner’s insurance prior to the closing, so that you are covered as soon as you take possession of the house. If you are purchasing an older home, you may want to consider a home warranty to protect you against costly repairs on appliances and heating and cooling systems.

Bring money to the closing. You will need to bring the balance of the down payment and the closing costs to the closing. Personal checks are generally not allowed, so you will need to bring funds in the form of a certified or cashier’s check.

Sign a lot of paperwork. On the day of the closing, you will need to sign a pile of paperwork, including affidavits, mortgage documents and receipts of various documentation.

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