Closings for Real Estate Investors: A Comprehensive Guide

Closing a real estate deal can feel like the finish line in the buying process, but it’s also a moment where precision and planning are essential.

While it may seem like the hard part is over, there are still important steps to complete to ensure everything goes smoothly.

From understanding the closing timeline to reviewing important documents and avoiding potential pitfalls, what happens at closing can significantly impact your success as an investor.

Below, we’ll guide you through the key steps and considerations to help make your real estate closing as seamless as possible.

Let’s begin.

Buying Process Overview

Before diving into the specifics of closing, it’s important to understand where we are in the full buying process.

First Meeting – This is where you meet with your real estate agent to discuss your goals, financing, and preferences. Your agent will use this information to help guide you through the process and setup MLS searches for properties that match your criteria.
Pre-Showings – Get qualified with a lender. Begin reviewing properties sent via email. Analyze deals and narrow down options that align with your needs.
Showings – You’ll visit potential properties in person to assess whether they fit your requirements and budget. This is where you begin to narrow down your choices.
Writing Offer – Once you find a property you like, you’ll work with your agent to write an offer.
Contract To Close – After your offer is accepted, the contract phase begins. This involves tasks such as inspections, appraisals, securing financing, and coordinating with the title company.
Closing – The culmination of the buying process, where documents are signed, funds are exchanged, and the property officially becomes yours.
Post Closing – After the closing, there are still steps to handle like transferring utilities, addressing any post-closing issues, and settling into your new property.

Closing Steps

When it comes to closing a real estate deal, I break it down into four major steps.

Understanding each step will help ensure a smooth closing process, minimizing any last-minute surprises.

Prepare for Closing – This step includes making sure all required documents are in order, reviewing the closing disclosure, coordinating with the lender, and ensuring good funds are available. You’ll also need to confirm any final details like closing dates and utility transfers.
Closing “Real Estate” – This involves signing the necessary documents related to the property itself, such as the deed and settlement statements. You will officially transfer ownership from the seller to the buyer during this step.
Closing “Financing” – This step is focused on securing the financing needed to complete the deal. You’ll sign the promissory note, deed of trust, and any other loan documents. The lender will wire the funds to the title company to complete the purchase.
Immediately After Closing – Once the closing is complete, there are still a few tasks to handle. You’ll switch utilities, ensure keys and possession are transferred, and if you’re a landlord, notify any tenants. It’s also time to confirm your first mortgage payment due date and make sure all documents are properly filed and stored.

Not Exactly Sequential

As we prepare for closing, it’s important to understand that the activities involved are not always sequential.

Some steps may need to be done simultaneously, while others might change based on contract dates and deadlines.

Go through all the items to ensure nothing is missed, then act on them in prioritized order based on your specific situation.

Be sure to consult with your real estate agent for guidance throughout the process.

Review Closing Docs

Some buyers prefer to read and review all the closing documents, while others may rely on their professionals to guide them through.

Keep in mind that closers often only schedule about an hour for the closing process. If you want to review every document in detail, it’s best to notify your real estate agent and the closer ahead of time, ideally about a week before closing.

They can provide you with copies of the documents in advance when possible.

This allows you to review them thoroughly beforehand, so at closing, you’re simply verifying the documents match what you’ve already seen.

This approach helps avoid delays and ensures you’re comfortable with the paperwork. You can also discuss any questions or concerns with your attorney or CPA during this time.

Change Utilities

Before closing, it’s essential to call the utility companies and have the services switched into your name effective as of the day of closing, as that day belongs to you as the buyer.

If you’re purchasing a rental property or there is already a tenant in place, ask the utility providers if they offer a landlord policy. A landlord policy automatically switches utilities back into your name if the tenant cancels them, avoiding any service interruptions. This policy differs from a regular owner-occupant setup because it ensures continuous service between tenants.

For new construction, some builders prefer that utilities aren’t switched until after closing, so it’s best to check with your real estate agent about how the builder handles this process.

The common utilities you’ll need to switch include:

Electric
Water
Sewer
Gas
Internet
Propane
Trash
Recycling

Review Closing Disclosure with Lender

Before closing, it’s important to go through the Closing Disclosure with your lender in detail. Your lender should be willing to review it with you, either in person or over the phone, to ensure you fully understand everything. There should be no surprises on the Closing Disclosure when you get to closing, so ask questions if anything is unclear.

You’ll want to carefully review the key details of your loan, including:

Interest Rate – Ensure it matches what was agreed upon.
Term of the Loan – Is it a 30-year loan? A 15-year loan? Double-check the term.
Monthly Payment – Know your exact monthly payment moving forward.
Down Payment Amount – Confirm the amount you need to bring to closing.

If you have Private Mortgage Insurance (PMI), clarify how much it will cost, whether it’s an upfront fee, a monthly fee, or both. Also, ask when PMI will be removed (if it will be) and the process for having it eliminated.

Be sure to review both the closing costs for the real estate transaction and for your loan with your lender:

Real Estate Closing Fee – This is often negotiated as part of the offer to buy and is typically split between buyer and seller. Check with your real estate agent if you’re unsure who pays what in your market.
Loan Closing Fee – This is separate and is usually paid by the buyer as it relates to securing the financing. If you negotiated seller concessions, you can use them to help cover this fee.

Some title companies bundle the real estate and loan closing fees into a single higher fee, so it’s important to clarify this in advance.

Finally, confirm the exact amount you’ll need to bring or wire to closing in “good funds.” Good funds typically refer to certified checks or wire transfers, and your title company will specify what is acceptable.

Be sure to check out our scam warning below to avoid potential fraud when wiring money.

Scam Warning!

When closing on a real estate deal, you need to be on high alert for scammers attempting to steal your closing funds. These scams are becoming more sophisticated, often involving email hacks to trick you into wiring your money to the wrong account.

One common strategy is for scammers to hack into your real estate agent’s email account and wait until they see a real estate closing coming up. Then, they’ll send a very official-looking email from your agent’s email address, mimicking the communication style and even including personal details from previous conversations. In the email, they’ll provide wiring instructions that seem legitimate but actually direct your money to the scammer’s account.

To Avoid this Scam – Never accept wiring instructions from your real estate agent, even if they seem genuine. Instead, contact the title company directly—using a phone number you look up independently or by visiting in person—and confirm the wiring instructions.
Be Paranoid! – Once money is wired to a scammer, it is incredibly difficult, if not impossible, to recover the funds, and you’ll likely miss your closing deadline. This could result in losing your earnest money and possibly the entire deal.

This is just one common scam, but there are others. Always be cautious and double-check any financial transactions during the closing process.

First Mortgage Payment Due

It’s important to find out from your lender when your first mortgage payment will be due. Typically, it won’t be due at the beginning of the month following your closing, but rather the second month after closing. For example, if you close on January 15th, your first payment is likely due on March 1st, not February 1st.

This is because mortgage payments are paid in arrears, meaning you’re paying for the previous month’s interest. At closing, you’ll pre-pay the interest from the day you close (e.g., January 15th) through the end of the month. These pre-paid amounts will be listed on your closing statement.

This means you’ll often have a month without needing to make a mortgage payment, which can improve your cash flow and therefore your cash-on-cash return, especially if you’re buying the property as a rental.

However, keep in mind that when you sell, you’ll need to account for any unpaid interest, which will likely show up as a mortgage payment due at closing for the time since your last payment.

Seller Concessions

When it comes to seller concessions, you should always aim to use 100% of the concessions you negotiated. This isn’t “free” money—it’s a part of your negotiation process, and if you don’t use all of it, that benefit essentially goes back to the seller.

You should have discussed how you’re using the concessions well in advance of closing, but now is your last opportunity to confirm everything is in place. While your real estate agent and lender should be tracking this, it’s ultimately your responsibility to ensure that none of the seller concessions go to waste.

What happens if you aren’t using 100% of your seller concessions?

Don’t Delay Closing – You’ll be in default if you don’t close on time, and making changes this late could cause delays.
Ask for an Amend/Extend – You could request the seller to reduce the concessions, but this may alter loan numbers and push back closing.
Buy Down the Interest Rate – You could ask the lender to use the excess to further buy down your interest rate, though this may also impact your loan numbers and closing timeline.
Increase Insurance Coverage – You could ask your insurance agent to raise your coverage or pay for the entire year up front, but again, this may affect the loan terms and delay closing.

Since making last-minute changes can complicate the loan approval process, it’s crucial to ensure early on that you’re using all your seller concessions. Avoid waiting until the last minute to check, as it can disrupt your entire closing process.

Verify Good Funds with the Title Company

Before closing, you’ll need to ensure that you’re bringing the appropriate form of “good funds” to cover your closing costs. Most title companies will allow you to bring the cash required to close in the form of a certified check. However, be warned: some title companies have specific policies that may differ, so it’s essential to confirm directly with them.

Always double-check with your real estate agent, who should verify with the closer at the title company, or reach out to the closer yourself to determine what constitutes “good funds” for your particular closing.

If you’re paying all cash, most title companies will require a wire transfer. If you’re getting a loan, the title company is often aware that the lender will verify the source of your down payment, so they may accept certified funds. However, it’s best not to assume—confirming this in advance will prevent any last-minute issues at closing.

Estimating Cash Required with Lender

If your lender is cutting it close and hasn’t finalized the numbers well in advance of your closing date, they may need to provide an estimate of the cash required to close. This often happens when the final, approved settlement statement isn’t ready in time.

In these cases, the estimated amount is typically a little higher than what you’ll actually need. If you overpay, you’ll receive a refund check from the title company at closing.

Remember to bring the required funds, and stay cautious with wiring instructions. As mentioned in the Scam Warning, always verify wiring details directly with the title company to protect yourself from fraud.

Real Estate Agent Reviews Settlement Statements

After you and your lender have reviewed your Closing Disclosure, your real estate agent will typically receive a copy of the Settlement Statement to review. Your agent should carefully check the following details to ensure everything is accurate before closing:

Verify that Buyer/Entity Name is Correct – Ensure the correct name(s) are listed per the contract.
Verify that Signature Line is Correct – If you’re buying under an LLC or another entity, make sure it’s listed correctly (for example signed as manager).
Verify that Property Address is Correct – Double-check that the property address listed is accurate.
Verify that Legal Description is Correct – Confirm the legal description matches the one in the contract.
Verify that Purchase Price is Correct – Check the purchase price for any errors. If there was a counterproposal, make sure any changes were accurately reflected.
Verify that Seller Concessions Have Been Credited – Ensure any negotiated seller concessions are applied as agreed.
Verify that All Earnest Money Deposits Are Credited Correctly – Make sure the earnest money you’ve already paid is properly credited.
Review Any Amend Extend(s) and Inspection Resolution – Check for any changes from amendments or inspection resolutions that should be reflected in the settlement statement.
Verify that the Owner’s Title Policy is Paid For – Confirm the owner’s title policy is being paid as specified in the contract.
Verify that the Owner’s Extended Coverage (OEC) is Paid For – If applicable, ensure this coverage is paid as agreed.
Verify that the Closing Services Fee is Paid For – Check that the fee for closing services matches what was negotiated in the contract.
Verify Annual Taxes for the Property – Look up the current mill levy on the county public records page to confirm the property tax calculations.
Verify that the Date of Proration is Correct – Ensure tax and other prorations are calculated as of the correct closing date.
Verify the Prorations for Property Taxes – Double-check that property taxes (and other taxes if applicable) are prorated correctly.
Verify Prorations for Rents (if applicable) – If the property is currently rented, verify rent prorations and that security deposits are credited correctly.
Verify the Prorations for HOA Assessments – Confirm that any prorations for HOA assessments are accurate.
Check for HOA Special Assessments – Verify if any HOA special assessments are due and accounted for.
Verify Other Prorations – Review any other prorations to ensure they’re calculated correctly.
Verify that HOA Status Letter is Charged as Specified – HOA charges are often listed in the Status Letter from the HOA.
Verify that HOA Record Change Fees are Charged as Specified – These fees should be referenced in the Status Letter from the HOA.
Double Check the Additional Provisions Section – Ensure any credits, charges, or other terms that affect closing numbers are reflected in the settlement statement.
Verify Home Warranty Coverage – If a home warranty was negotiated, make sure it’s included and paid for by the correct party (whether you or the seller).
Verify Real Estate Agent Commissions – Ensure the real estate agent commissions are correct and align with what was agreed upon.

If your real estate agent finds any discrepancies, they should email the closer immediately to resolve the issue and often BCC you so you’re aware, without publicly embarrassing the closer.

Once your agent receives the settlement statement, they’ll typically forward a copy to you for redundancy, although you should already have received one from the closer or your lender.

If this is part of a 1031 tax-deferred exchange, be mindful of any additional special requirements that may apply.

Tense Negotiation

If negotiations between you and the seller have been tense and you’re dreading seeing them face-to-face at closing, there are a few things to consider.

It’s often customary for both the buyer and seller to be present at the same table to close and finalize the funding. This can actually be a great opportunity to gather valuable “inside information” about the property. Sellers often share details about the home’s history, the neighborhood, HOA insights, and even tips about neighbors. Attending the closing in person can help you get this informal but useful information.

However, in cases where negotiations were difficult, or for other practical reasons like scheduling conflicts or childcare needs, it’s possible to close at different times, on separate days, or even in different locations. Some buyers and sellers prefer this option when tensions run high to avoid an awkward meeting.

Most title companies are willing to accommodate separate closings, but you’ll need to provide enough advance notice for them to arrange it. If you think you’d prefer to close separately, talk to your real estate agent or the closer at least a week before closing. In most cases, the need for separate closings becomes apparent during the Inspection Resolution or Appraisal Resolution Deadlines, which tend to be the points where negotiations are most likely to get heated.

Your real estate agent and closer can help facilitate a smoother process if you choose this route.

Mail Away Closing

A mail away closing is relatively uncommon, but sometimes necessary when a buyer or seller cannot be in town on the day of closing. With enough advance notice, the closer at the title company can prepare a mail away closing packet.

This process can be completed either at another (often related) title company or with the assistance of a mobile notary. It’s important to allow ample time to mail the closing packet to you, complete the necessary paperwork, and return it before the scheduled closing day to avoid delays. Planning ahead will help ensure everything goes smoothly, even if you’re not able to be physically present at closing.

Power of Attorney

As an alternative to a mail away closing, if the buyer or seller won’t be in town on closing day, the closer at the title company can often prepare a Power of Attorney (POA) to have someone else sign on their behalf. However, this needs to be arranged with ample advance notice to ensure everything is set up correctly.

If the Power of Attorney is for the buyer, it’s crucial to confirm that the lender is okay with this arrangement for the loan. Not all lenders allow the use of a POA, so it’s important to check with them early if you think this might apply to your situation. Proper preparation is key to making sure everything goes smoothly.

Kids at Closing

While smooth closings usually take about an hour, they do require your full attention, which can make it difficult to manage children at the same time. If anything goes sideways or there are unexpected delays, the closing could take much longer.

Because of this, many clients prefer to arrange childcare with family members, daycare, or a babysitter for closing day. It’s a good idea to plan ahead and ensure your kids are cared for so you can focus on the details of closing without distraction.

What to Bring to Closing

Make sure you bring the following items to closing to ensure everything goes smoothly:

Driver’s License for Each Buyer – You’ll need to provide photo identification to confirm your identity before signing the paperwork.
Backup Identification for Each Buyer – Sometimes, the title company or lender may require a second form of ID. Check with the title company or lender ahead of time to confirm what’s acceptable.
Good Funds for “Cash Required at Closing” – This is typically a certified check or wire transfer. And remember, as we’ve discussed, scammers often target real estate closings, so be cautious and verify all wiring instructions directly with the title company.
Your Checkbook – Bring your checkbook (or your LLC’s checkbook if you’re purchasing under an entity). Occasionally, last-minute changes may require you to write a small check at closing to cover any final adjustments.

Final Walkthrough

I recommend doing your final walkthrough 30-60 minutes before closing to ensure everything is as expected.

This gives you time to address any issues before signing the paperwork and taking on the loan for the property.

Here’s what to verify during the walkthrough:

Seller Is Moved Out – Unless the seller has a Post-Closing Occupancy Agreement or the property is tenant-occupied, the seller should be fully moved out. If they are not, discuss submitting an Amend/Extend to delay closing and consider the consequences if you don’t close (you’d be in default). You may also need to close and then pursue eviction, potentially collecting a per-day fee for failure to give possession after closing. Consult with an attorney if needed.
Work From Inspection Resolution Is Complete – Ensure that any work agreed upon during the inspection resolution has been completed and is up to standard. If not, you’ll need to consider an Amend/Extend to delay closing or decide whether to close and pursue the seller afterward. Again, consulting an attorney before closing is recommended.
Inclusions Are Still Present – Check that all agreed-upon inclusions (e.g., appliances or fixtures) are still in the property. If anything is missing, you may need to contact the seller’s agent or submit an Amend/Extend to delay closing. If you choose to close, you could later pursue legal action for the missing items, and you should talk to an attorney about this beforehand.
All Unwanted Items Have Been Removed – Ensure that everything the seller was supposed to remove has been taken care of. If items remain, you may need to negotiate through the seller’s agent or consider an Amend/Extend. Closing with leftover items could lead to legal action to have them removed, or you may have to pay for their removal yourself. Consult with an attorney if necessary.

By handling these checks before closing, you can address any surprises and avoid potential complications. You may still choose to close on the property if issues arise, but it’s better to get this type of bad news BEFORE signing. This allows you to consult with your attorney who may advise against closing. Getting bad news early empowers you to make informed decisions, rather than waiting and limiting your options to just those available once you’ve closed.

Closing Proceeds

Typically, closing proceeds are associated with sellers receiving money, but there are situations where buyers may get money at closing as well. Here are two common examples:

VA/USDA Loans – In these cases, you might get your earnest money back at closing.
Lender Over-Estimated Cash Required to Close – If the lender overestimates your closing costs, the title company may issue you a refund check at closing.

It’s important to determine how you’d like to receive any closing proceeds.

This is usually done by check made out to you (or your LLC, if applicable), but it can also be done by wire transfer (especially for larger amounts). If you prefer a wire transfer, be sure to have the wiring instructions ready for the account where you want the funds to go. There may be additional costs to having the money wired.

Rents Collected at Closing

How rents are handled during closing is typically negotiated as part of the contract when you make your offer.

Rent is usually pro-rated to the day of closing, meaning the seller will be responsible for rents collected up to that date, and the buyer will take over from the closing day forward.

Typically, the buyer owns the day of closing, so you’ll start collecting rents from that day onward.

There are two primary methods for calculating how much rent you, as the buyer, will receive as a credit at closing: Accrued versus Received.

Here’s the difference:

Accrued – Rent is pro-rated based on what is owed, regardless of whether the seller actually received it. For example, if the tenant is late paying rent, the seller will still credit you as if they were paid on time. This can create a tricky situation where the seller, who no longer owns the property, might try to collect the late rent from the tenant. However, since you now own the property, you’ll need to deal with the tenant after closing.
Received – Rent is pro-rated based on what the seller actually collected by the time of closing. In this case, you will need to go and collect any overdue rents from the tenants after closing. This method keeps things cleaner but puts the responsibility for collecting any outstanding rent on you.

Obviously, there are pros and cons to each option. Which method is used will depend on what was agreed upon in the contract, so make sure it’s clearly defined during negotiations in the offer to buy.

Title Insurance Review

By the time you get to closing, you should have already reviewed your title insurance policy and had a chance to meet with your real estate investing dream team—your title company, attorney, CPA, and other professionals—to address any questions.

We cover this in much greater detail in our other resources, but a really quick review of the most basic information:

What is title insurance? Title insurance protects you by ensuring that you’re getting clear ownership of the property, free from any legal claims or title issues.
Who does it insure? Title insurance covers both the buyer and the seller, though it primarily protects the buyer by guaranteeing the property’s clear title.
Who pays? This is usually negotiated in the Contract to Buy and Sell Real Estate. While it’s often customary for the seller to pay for title insurance, it can be negotiated differently depending on the deal.
Is it one-time or recurring? Title insurance is a one-time, up-front premium, meaning there are no recurring fees associated with it.

Hold Open Title Policy

If you’re planning to sell the property shortly after buying it, consider asking your closer from the title company about a Hold Open Title Policy.

A hold open policy allows you to pay a small additional fee at the time of your initial closing, but it can save you a significant amount of money if you sell the property within a year or two and use the same title company. This policy keeps the title open, so when you sell the property, you won’t have to pay for a new title policy.

This is especially useful for investors planning to flip properties, as it reduces transaction costs when you sell the property soon after buying it. It’s a smart way to keep more money in your pocket during quick-turnaround deals.

Property Taxes

At closing, the title company will collect property taxes from the seller up to the day of closing. This amount will appear as a credit on your Settlement Statement as the buyer.

After closing, you’ll be responsible for paying the entire property tax bill when it’s due for the remainder of the year.

Remember, the seller has already credited you for their portion, which is important to note since some buyers feel frustrated when paying the full tax bill, not realizing they received the seller’s share at closing.

The day of closing belongs to the buyer when calculating prorations.

In most cases, your lender will set up a special escrow account for property taxes. Here’s how it works:

The lender requires you to fund the account with the taxes owed up to the point of closing.
They’ll collect roughly 1/12 of the annual property tax amount with each mortgage payment.
The escrow account will be used to send payments to cover property taxes, usually once or twice a year.
If property taxes increase (or in rare cases, decrease), your monthly payment will be adjusted accordingly to ensure there are enough funds in the escrow account to cover the taxes.
A similar process applies for insurance payments on the property.

Property Taxes on New Construction

Handling property taxes for new construction can vary based on your market, how the county assesses taxes, and how your lender and title company manage the process. It’s important to check with your real estate agent, lender, and title company to get a clear understanding of how it works in your area.

Here’s what typically happens:

The tax assessor usually assesses the property as vacant land at the time of closing.
The lender will often collect property taxes for escrow as if the property has been fully assessed with the house already built.
Sometimes, if the property isn’t reassessed promptly, the escrow servicer may mistakenly issue a refund, thinking there’s a surplus in the account.

If you receive a large refund check, don’t spend it. Set it aside because you may need those funds to pay the property taxes once the property is reassessed.

Occasionally, the escrow portion of your mortgage payment will be reduced, making your monthly payment appear lower than it should be. This can leave you short for next year’s taxes, leading to an escrow shortage once the taxes are reassessed and increase.

In such cases, the lender may notify you of the shortage and require you to either make a lump sum payment to cover it or increase your monthly escrow payments until you catch up. This could negatively affect your rental property’s cash flow, so it’s important to plan accordingly.

Discuss this in detail with your real estate agent to ensure you’re well-prepared for any adjustments.

Two Primary Groups of Documents

When it comes to closing, there are really two primary groups of documents that you’ll be dealing with. Each group serves a different purpose.

Real Estate Closing Documents – These documents are related to the transfer of the property itself. They include items like the deed, settlement statement, and any other paperwork required to legally transfer ownership of the property from the seller to the buyer.
Financing Closing Documents – These are tied to the loan you’re using to purchase the property. They include documents like the promissory note, deed of trust, and any other paperwork required by the lender to finalize your mortgage.

We’ll cover each group in more detail below.

Real Estate Closing Documents

The specific real estate closing documents you’ll encounter can vary depending on your location and the type of transaction. Below is a list of common documents you might see at closing, along with brief explanations of each.

Buyer’s Settlement Statement (sometimes called Closing Statement or HUD-1) – A breakdown of the financial details of the transaction, including how much the buyer owes at closing, credits, and costs associated with the sale.
Deed – The legal document that transfers ownership of the property from the seller to the buyer.
Deed Preparation Affidavit – A document confirming the accuracy of the deed’s preparation and its details.
Closing Instructions (again) – The title company’s instructions outlining how the closing process should be handled and what steps need to be followed.
Real Property Transfer Declaration – TD-1000 – A document used to declare the sale price of the property for tax purposes.
Owner’s Affidavit of Occupancy – A statement confirming whether the buyer will occupy the property as a primary residence.
Privacy Release Form – A form allowing the release of personal information to relevant parties involved in the transaction.
Title Disclosures – Documents that disclose any title-related issues, including any liens or encumbrances on the property.
Homeowner’s Disclosure Form (for HOA if applicable) – A disclosure of any information relevant to the homeowners association, such as fees and rules.
Homeowners Association Indemnity (for HOA if applicable) – An agreement that indemnifies the buyer from certain obligations related to the homeowners association.
Utility Transfer Forms (if applicable) – Forms used to transfer utility services from the seller to the buyer.
Utility Escrow Agreement (if applicable) – An agreement that establishes an escrow account to cover utility costs during the transfer.
Water and Sewer Agreement (if applicable) – A document that details the transfer and payment of water and sewer services.
Final Utility Bill or Summary – A final statement summarizing any remaining utility costs owed by the seller.
Bill of Sale – A document transferring ownership of personal property (e.g., appliances) included in the real estate sale.
Buyer’s Final Affidavit – A sworn statement by the buyer attesting to the accuracy of the closing documents and the buyer’s information.
Certificate of Taxes Due – A statement showing the taxes owed on the property up to the date of closing.
Real Estate Tax/Assessment Agreement – An agreement regarding any property tax assessments tied to the property.
Compliance Agreement and Limited Power of Attorney – A document giving the title company authority to correct minor errors in closing paperwork after closing.
Some New Construction Builders Have Additional Forms and Disclosures – Additional documentation required when purchasing a newly built home.
FDIC Coverage Disclosure Statement – A form that discloses FDIC insurance coverage limits for funds held by the title company.
Verification of Customer Identity – A form used to verify the buyer’s identity as part of anti-fraud measures.
Assignment of Leases – A document that formally transfers any existing leases from the seller to the buyer for rental properties.
Lease (for Post Closing Occupancy Agreement) – A lease agreement if the seller remains in the property after closing, outlining the terms of their temporary occupancy.

While this list covers common documents, keep in mind that your specific transaction may require additional or different paperwork.

Common Types of Deeds

Deeds are legal documents that transfer ownership of a property from the seller to the buyer. There are several types of deeds, each offering varying levels of protection. Here are the most common types:

General Warranty Deed – This deed provides the highest level of protection for the buyer. The seller guarantees that they hold clear title to the property and will defend the buyer against any claims or issues with the title, even from before the seller owned it.
Special Warranty Deed – With this deed, the seller only guarantees that there were no title issues during their ownership. It does not provide protection for any claims or problems that arose before the seller took ownership.
Quit-Claim Deed – This deed offers the least protection. The seller transfers their interest in the property without making any warranties or guarantees about the title. It’s often used in situations where the property is being transferred between family members or to clear up title issues.

For more detailed information on deeds and how they affect your property purchase, be sure to check out our additional resources on this topic.

Getting a Copy of Your Deed

You’ll receive a copy of your deed at closing, officially transferring ownership of the property to you. If you ever need additional copies, simply contact your real estate agent or the closer from the title company. They can usually provide extra copies for free or for a very small fee.

IMPORTANT NOTE: Be cautious of junk mail. Some companies will send official-looking letters, offering to provide a copy of your deed for a steep fee—sometimes around $100. While not technically a scam, it’s misleading because you can easily get a copy from your agent or title company for little to no cost. These companies make it seem like you need to pay them, but it’s unnecessary and sketchy.

If you receive any documents or correspondence related to your real estate transaction that you don’t understand, contact your real estate agent, lender, or the title company (in that order) for clarification before taking any action.

Assignment of Leases

If you’re buying a property with tenants in place, it’s crucial to obtain an Assignment of Leases from the seller. This document officially transfers the existing leases from the seller to you, giving you the legal authority to collect rent and manage the tenants.

Failure to get an Assignment of Leases could lead to complications. Without it, the tenant could argue that you are not entitled to the rent or have no authority to evict them, since their lease agreement was with the previous owner, not you. Make sure this transfer is part of your closing process to avoid any issues with the tenants after the purchase.

Lease for Post-Closing Occupancy

A Post-Closing Occupancy occurs when the seller needs additional time to remain in the property after the closing date. This can happen if the seller hasn’t found a new home yet, requires the sale proceeds to purchase a replacement property, or simply needs extra time to move.

These agreements are usually negotiated as part of the original offer. However, in rare cases, you could end up with a post-closing occupancy if the seller is still in the property during your final walkthrough.

If the seller is staying in the property after closing (referred to as delayed possession), it’s a good idea to discuss with your attorney the possibility of creating a formal lease for the duration of their stay. This provides a clear legal agreement between you and the seller, who is now technically your tenant.

Most buyers prefer not to allow post-closing occupancy for longer than 30 days. Some may even object to terms exceeding 60 days, particularly if the buyer is an owner-occupant who must move into the property within 60 days to comply with loan terms and avoid loan fraud.

It’s essential to have a written agreement outlining the terms of the arrangement. This document should closely resemble a standard lease, if not being a formal lease itself. It should cover key details such as rent and security deposit, which should have been negotiated as part of the Post-Closing Occupancy Agreement in the original Contract to Buy and Sell Real Estate. Having everything in writing ensures that both parties understand and agree to the terms during the seller’s extended stay, helping to prevent any misunderstandings or legal complications.

Real Estate Agent Attending Closing

It’s my strong opinion that your real estate agent should attend the closing with you. Having your agent there ensures they can address any last-minute questions or issues that may arise. However, not all real estate agents attend closing in person.

In cases where the agent doesn’t attend, they may sign the necessary documents either ahead of time or after the closing has taken place. While this is sometimes acceptable, having your agent present at the closing can provide added peace of mind and help make the process smoother.

Financing Closing Documents

As mentioned earlier, there are two primary groups of documents at closing: real estate-related documents and financing-related documents. We’ve already covered the real estate documents; now let’s look at the common financing documents you’ll encounter. Keep in mind that these can vary based on your market and the specifics of your transaction.

Deed of Trust – This document secures the loan with the property. It’s the legal instrument that allows the lender to foreclose on the property if you default on the loan.
Promissory Note – The promissory note outlines the terms of your loan, including the amount borrowed, the interest rate, and the repayment terms. It is your promise to repay the loan.
Planned Unit Development Rider – If your property is part of a planned unit development (PUD), this rider outlines the responsibilities of the homeowner and any obligations to the homeowners association (HOA).
Balloon Rider – This rider applies if your loan has a balloon payment, meaning the loan balance will be due in full after a set number of years. It outlines the terms and schedule for repayment of that lump sum.
1-4 Family Rider – For properties with one to four units, this rider explains additional terms related to renting out units or other conditions affecting multi-family homes.
Adjustable Rate Rider – If you have an adjustable-rate mortgage (ARM), this rider explains how and when your interest rate may change over time.
Occupancy Requirement Disclosure – This document is crucial for Nomads™ or owner-occupants. It discloses that you are required to occupy the property as your primary residence within a specified time frame, usually within 60 days, to meet loan requirements.
Closing Disclosure – This document details the final costs and terms of your loan, including closing costs, interest rates, and loan terms. It’s essential to review this carefully to ensure everything matches your expectations.

Each of these documents plays a critical role in your financing process, so be sure to review them carefully and ask questions if anything is unclear.

Lenders Attending Closing

It’s my strong opinion that your lender should attend closing with you, though many lenders do not.

While the lender typically doesn’t have much to do during the closing process, their presence is invaluable if an issue arises with the loan or its funding. Having them there allows for immediate troubleshooting and can help resolve any problems that may delay or derail the closing.

Maybe I’m a bit cynical, but it seems like lenders sometimes attend closings to meet new real estate agents, particularly the seller’s agent, or to strengthen relationships with agents who might bring them future business. This often happens with the first few loans they do for a new buyer’s agent.

What Happens if Your Lender Does Not Fund the Loan for Closing?

If your lender fails to fund the loan, the responsibility falls on you as the buyer.

While you may later choose to pursue legal action against the lender, you will still be in default of your contract with the seller—not the lender who is not a party to the contract.

This is why it’s crucial to ensure your lender has a strong track record of funding loans on time and has a reputation for showing up at closings with the money as agreed. If your lender doesn’t follow through, it can jeopardize your deal, causing delays or even leading to a lost opportunity. Be sure to choose a reliable lender who consistently performs.

Change Locks

It’s highly recommended to change the locks on all properties after closing, whether it’s a rental or new construction.

You never know who might still have keys or copies of keys—contractors, previous owners, or even past tenants. Changing the locks is an inexpensive way to protect yourself from this small but real risk.

While many buyers opt not to change the locks on new construction properties, it’s still a good idea.

Even in brand-new homes, numerous people may have had access during the building process, and changing the locks is a simple, low-cost way to ensure you’re the only one with keys.

Closing Documents and Files

You’ll need your closing documents for tax purposes, so it’s essential to keep them organized and easily accessible.

Create a folder on your computer with copies of all your closing documents, including real estate, financing, and contract-related paperwork.

You can obtain these documents from two sources:

Real Estate and Financing Documents – Get these from the closer at the title company.
Contract Documents – Your real estate agent can provide these for you.

Keeping everything in one place will make things much easier when it’s time to file your taxes or reference these documents in the future.

Mailbox Keys

If you’re moving in as a Nomad™ or house hacker, bring a copy of your deed to the post office to get your mailbox keys. You should have received the deed at closing from the title company. If you didn’t or can’t locate it, ask your real estate agent or the title company for assistance.

Complete your change of address with your other accounts, friends, and family.
Forward all your mail through the United States Postal Service (USPS).

If you have tenants moving into the property, do not obtain the mailbox keys yourself. Instead, have your tenant bring their lease to the post office to get their own mailbox keys.

Change of Address

If you’re moving in as a Nomad™ or house hacker, you’ll need to update your address as the owner-occupant. To streamline the process, here are some key steps:

Consider switching as many accounts as possible to electronic statements.
Think about getting a PO Box or private mailbox for added security.

Update your address with the following entities:

Debit and credit card companies
Mortgage providers for other properties
Utility companies
Insurance companies
Banks and credit unions
Homeowner’s associations (HOAs)
Your employer
Health and dental insurance providers
The county for property tax and contact information
IRA, 401(k), and investment/retirement account companies
Subscriptions, including magazines or online services

Additionally, notify your friends and family of your new contact information and update your records with other tenants and tenant-buyers you may be working with.

Reminder About Occupancy Fraud

If you’re using an owner-occupant loan, most lenders will require you to occupy the property within 60 days of closing. This requirement is typically outlined in a form you’ll sign at closing, confirming your intent to move in.

This applies to most Nomads™ and house hackers, as the owner-occupant loan is tied to the condition that you make the property your primary residence.

So, make sure to plan accordingly and move in within the 60-day window to stay in compliance with your loan terms.

Notify Tenants

If you’ve purchased a property with tenants already in place, it’s important to contact them immediately after closing. In your first communication, be sure to:

Introduce yourself as the new owner.
Provide your contact information for paying rent, requesting maintenance, and renewing the lease. Make sure they understand how to send rent payments, how to report any maintenance issues, and what the process will be for renewing their lease when the time comes.

This initial communication helps ensure a smooth transition and establishes clear lines of contact with your tenants.

Notify Neighbors

Ideally, you may have already met some neighbors before making an offer, as part of your due diligence when checking out the property and asking questions about the neighborhood.

After closing, it’s a good idea to introduce yourself to the neighbors of your new property. Provide them with your contact information and encourage them to reach out if they notice anything unusual or concerning at the property.

This is especially helpful if the property is a rental, as neighbors can keep an eye on things when you’re not around. However, it’s equally valuable for owner-occupants to build a positive relationship with the neighbors for long-term goodwill and neighborhood connections.