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Whether you are buying or selling a home, it’s important to ensure that your closing process is as hassle-free as possible. The following checklist will help you avoid common mistakes and prevent legal issues from arising on the big day.
The “closing checklist template” is a document that will help you prepare for your closing. It includes information on what to expect and the steps to take before, during, and after the closing.
Download the Buyers’ Closing Checklist
1. Identify the participants in the transaction.
Make a spreadsheet with a list of everyone involved in the transaction and their contact information in case either party needs to be contacted at any point throughout the process. This spreadsheet should be shared with both the buyer’s and seller’s agents in order to keep both sides informed and aware of all participants in the game.
The following persons should be on the closing checklist for a real estate buyer:
- Clients who are acquiring a property are referred to as “buyers.”
- Clients who are selling their house are referred to as “sellers.”
- Buyer’s agent: A buyer’s agent is someone who represents the buyer (s)
- The seller’s agent is a person who represents the seller (s)
- If appropriate, transaction coordinator (for buyer and seller’s agents): An employee of each agent’s firm who assists in the coordination of the transaction schedule and paperwork.
- Lender/loan officer: A bank that is funding the buyer’s purchase.
- The title firm verifies that the buyer has a valid title to the property being acquired.
- During a real estate transaction, an escrow company/escrow officer holds and administers the money until the deal is completed.
- Attorney (if required by the state): Real estate agents never provide legal advice, thus customers should always get legal guidance from a lawyer.
- Accountant: Agents, like lawyers, should never offer financial advice, and customers should seek financial guidance from an accountant.
- Company(ies)/Inspectors in charge of inspections: Always employ expert inspectors, such as house inspectors, termite inspectors, radon inspectors, pool inspectors, roof inspectors, chimney inspectors, and so on, to prevent liabilities.
- Agent/Company of Insurance: Homeowner’s Insurance is essential and needed by the lender; even if you are buying a property with cash, it is a good idea to insure it.
Pro tip: All communication between buyers and sellers should be handled through their agents or attorneys so that they do not come into direct contact. As a buyer’s agent, you should tell your customers not to contact the seller directly; instead, they should interact through you to keep the process on track.
Create a Transaction Timeline in Step 2
At the start of escrow, you or a transaction coordinator will make sure that all parties have a timeline that includes all of the important dates and deadlines for closing. All of the stages on this real estate closing checklist, as well as crucial benchmarks that must be met in order for the transaction to move well, should be included in the timetable.
Appraisals, inspections, and loan conditions are all part of the closing process. Furthermore, each of these conditions must be satisfied and deleted within defined time frames.
Appraisal contingency: A third party (typically a mortgage lender) hires an appraiser to determine the home’s market worth. If the assessed value is less than the selling price, the buyer has the option of rejecting the contract without losing their earnest money.
Inspection contingency: This clause allows purchasers to have the house professionally examined before proceeding with the purchase. If a major flaw is discovered during the inspection, the buyer has the option of having it remedied by the seller or opting out of the transaction.
Loan (or finance) contingency: If a buyer decides to finance the acquisition, they have a specified period of time to arrange a loan. If the buyer’s mortgage goes through and prohibits them from completing the purchase, this contingency permits them to back out of the contract.
Timelines are important, and every effort should be made to stick to them. Naturally, “life occurs,” and we must adapt and change accordingly. When something unexpected happens, you must be proactive in order to get back on track as quickly as feasible. Ensure that all parties have studied the transaction timetable and are in agreement so that they can adhere to the contract and meet the dates for the transfer of ownership.
3. Lender Requirements & Appraisal
Most buyers visit with a lender to be pre-approved for a loan before making an offer on a house. Specific papers, like as pay stubs, tax returns, investments, bank statements, and credit reports, will be required by a lender in order to qualify your buyer. The lender will need updated income records and bank statements from your buyer throughout the transaction, as well as contact information for the buyer’s workplace to verify employment status.
The lender will also arrange an appraisal at the start of the transaction to ensure that the property’s worth is adequate to warrant the amount of money being provided to the buyer. In a competitive market when sellers are often bombarded with several offers, the buyer may choose to waive the appraisal contingency. If the assessed value is too low in comparison to the selling price, the buyer and seller may need to renegotiate the contract’s initial provisions.
In this situation, the buyer may be obliged to pay more for the house than the appraised value. The buyer who decides to take this risk should have extra cash evidenced in bank statements to cover the difference between the amount the lender is willing to lend and the amount required to complete the transaction.
Pro tip: Remind the buyer not to make significant purchases, change jobs, skip bill payments, or transfer cash from one account to another without first consulting their lender. Any of these factors might have an impact on a buyer’s ability to acquire a property.
4. Inspection Requests
The buyer has the right to conduct any and all inspections to assuage any worries they may have under the terms of the purchase contract. A buyer may decrease their time limits to perform inspections more rapidly in order to remain competitive.
A professional home inspector should be contacted to check the house at this period. They may look at the structure, exterior, and interior of the house, major appliances, heating, ventilation, and air conditioning (HVAC), outbuildings or pools, the presence of toxic chemicals or gasses, and pests like termites or rats, which may cause damage that is otherwise undetectable.
The inspector will photograph the property and produce a full report on it. The buyer and their agent should evaluate the results as soon as feasible after receiving the inspection report. If the buyer wishes to seek repairs, they must do it within the time range specified in the contract so that the seller may negotiate terms. A follow-up inspection may be necessary prior to closure, depending on the importance or severity of the problems that need to be corrected.
During the inspection period, it is critical to have open lines of communication. Once the inspectors have discovered damage or the need for repairs, you must contact the seller’s agent to inform them of the items noted. Prior to receiving a repair request, set the expectations and ensure that the listing agent gets the chance to communicate with the seller.
5. Documents to Be Signed
In California, agents work with title and escrow businesses, although in other jurisdictions, like as New Jersey, they may work with lawyers. The title firm (or attorney) and the lender will collaborate to ensure that the statistics and conditions of your buyer’s loan are in balance. Once this is done, the lender will arrange for your buyer’s loan documentation to be drafted and signed by title.
The lender will also tell your buyer how much money they need to send to the title business. The process of transferring ownership of the house from the seller to your buyer will be one step closer after the buyer’s monies and the lender’s funds have been sent to the title company’s account.
It’s crucial to keep in touch with your customer during this process and coach them through the final formalities of completing their loan documentation. Because closing paperwork will be notarized, your buyer will be required to show a legitimate form of identity at the time of signing. This may need to be a government-issued identification such as a driver’s license or a passport.
6. Checklist for Moving
Give your buyer a moving checklist to add value to your services as a real estate agent. Phone numbers for services that the buyer will need to set up at their new house should be included on this list. A buyer who is moving in from out of the neighborhood, in particular, would be grateful for your assistance in settling in. The following things may be on your moving checklist:
- Water
- Garbage
- Electricity
- Gas
- Internet and cable
- Movers
- Painters
- Locksmith
- Landscapers
You, as the buyer’s agent, are not responsible for setting up these services for them, but by doing so, you are presenting your buyer with an exceptional beginning-to-end transaction that will have your clients screaming your praises to others, who may become future client recommendations.
7. Final Inspection
When you reach the final walk-through, you’re almost ready to hand over the keys to your new house to your buyer. Typically, three to five days before escrow closes, you and your buyer will do a final walk-through to ensure that the home looks as it did when it was first purchased and that anything the seller agreed to do as a result of inspection findings or as outlined in buying contingencies has been completed.
Test all appliances, plumbing, heating and cooling, and outlets to ensure that the property is ready for your customers. Run the dishwashing and laundry machines through a fast cycle. Preheat the oven, flush the toilets, run hot and cold water through each sink, open each cupboard, test the fire alarms, and so on. As the buyer’s agent, your major responsibility is to ensure that the house they’re buying is worth the money they’re paying, so don’t leave any stone unturned.
Pro tip: During your final walk-through, bring a nightlight with you to test each outlet by plugging it in and seeing whether the nightlight turns on.
Before the loan is funded, make sure you complete a walk-through. If anything is discovered during the walk-through, you will have more time to organize repairs and resolution before closing and transferring the title.
8. Closing & Presenting Keys
Closing day has finally come. The closing will usually take place at the attorney’s, title company’s, or lender’s offices, where your buyer will be needed to sign a number of paperwork in order to finalize the transaction.
Closing paperwork vary by state, but they often contain the following:
- A promissory note is a guarantee from the buyer to the lender that the money borrowed will be repaid.
- Mortgage: Describes the conditions under which a buyer borrows money from a bank.
- Statement of “truth in lending”: Describes the entire amount of the buyer’s loan throughout the term of the loan (interest rates and annual percentage rate)
- Transfers ownership from the seller to the buyer via a title or deed.
- A breakdown of the buyer’s monthly payments is provided in a monthly payment letter (mortgage, principal, interest, taxes, and so on)
- Proof of homeowners Insurance: If the buyer is getting a loan, they must provide proof of Insurance to the lender for the life of the loan (even if a buyer is paying with all cash, they should still have homeowners Insurance)
- Bill of sale: The bill of sale is a legal document that outlines the personal property that will be transferred to the new owners of the residence (appliances, furniture, light fixtures, and so forth)
- Completed loan application: The buyer will get a fresh copy of the loan application they completed and will need to double-check the details.
As the buyer’s agent, you should have previously informed your client about any and all closing charges that they will be responsible for in order to avoid any unpleasant surprises. Your customer will be able to pick up the keys to their new house after they have signed the mountain of paperwork.
This is an excellent moment to congratulate your buyer and confirm that you will be their real estate agent for the rest of their lives. Whether the transaction went well or you had to go through the wringer to obtain this house, you can ensure a great experience by sticking to deadlines, being professional, and prepping the buyer throughout the process.
Consider offering a present to your customers as a way of congratulating them on their purchase. This will make a lasting impact, increasing their likelihood of singing your praises to everyone and referring friends and relatives who are looking to buy a house to you. This present might be a handwritten thank-you card, a welcome home basket with cleaning items and return address labels, a plant, a personalized photo, or a scrapbook documenting your homebuying journey together.
Use a service like EvaBot to deliver a bespoke gift from $20 to $1,000 directly to your client’s doorstep if you’re having difficulties picking which closing present to offer them. Eva will speak with your customer to assess their preferences before delivering them a personalized gift with your logo. To learn more, visit their website:
EvaBot may be found on the internet.
Choose a different alternative
Download the Sellers’ Closing Checklist
1. Identify the participants in the transaction.
Make a spreadsheet with a list of everyone involved in the transaction and their contact information in case either party needs to be contacted at any point throughout the process. This spreadsheet should be shared with both the buyer’s and seller’s agents in order to keep both sides informed and aware of all participants in the game.
The following persons should be on the closing checklist for a real estate seller:
- Clients who are selling their house are referred to as “sellers.”
- Clients who are acquiring a property are referred to as “buyers.”
- The seller’s agent is a person who represents the seller (s)
- Buyer’s agent: A buyer’s agent is someone who represents the buyer (s)
- If appropriate, transaction coordinator (for buyer and seller’s agents): Individual who works for each agent’s firm and assists with transaction timelines and paperwork coordination.
- Lender/loan officer: A bank that is funding the buyer’s purchase.
- The title firm verifies that the buyer has a valid title to the property being acquired.
- During a real estate transaction, an escrow company/escrow officer holds and administers the money until the deal is completed.
- Attorney (if required by the state): Real estate agents never provide legal advice, thus customers should always get legal guidance from a lawyer.
- Accountant: Agents, like lawyers, should never offer financial advice, and customers should seek financial guidance from an accountant.
- Company(ies)/Inspectors in charge of inspections: Always employ expert inspectors, such as house inspectors, termite inspectors, radon inspectors, pool inspectors, roof inspectors, chimney inspectors, and so on, to prevent liabilities.
- Agent/Company of Insurance: Homeowner’s Insurance is essential and mandated by the lender—even if you are buying a property with cash, it is a good idea to insure it.
Pro tip: To avoid having to contact each other directly, all communication between buyers and sellers should go via their agents or lawyers. As a seller’s agent, you should tell your clients not to seek out to the purchasers directly. To keep the process on track, they should only communicate through you.
Create a Transaction Timeline in Step 2
You or your transaction coordinator ensures that all parties receive a timetable of crucial dates and deadlines at the start of an escrow, just as you did with the buyer. These standards must be met in order for the transaction to run successfully.
Ascertain that all parties have seen and agreed on the transaction timeframe. Keep in mind that your seller may have acquired another house and, as a result, has to be even more conscientious about the deadline. A domino effect happens when anything affects the process of numerous parties relocating because various homebuying and selling procedures are taking place at the same time.
We always expect that all parties will work together to ensure a successful closure, but if one of the procedures is missed, it might jeopardize the whole transaction. Your closing will not be delayed if you communicate transaction timing facts to your seller and have a backup plan in place.
3. Reviewing Inspections & Repair Requests
You negotiated the contract conditions when you originally presented the offer to your seller. If a buyer chooses to complete inspections and there are issues, you may have to re-negotiate conditions. When you accept a listing, it’s critical to establish the seller’s expectations up front.
It should not come as a surprise to your seller if the buyer’s agent sends you a repair request or requests for a credit toward repairs after an inspection. When you took the listing, you should have been proactive in identifying and estimating the possible cost of any condition, safety, health, or code violation repairs that could be required.
If repairs are required and the seller intends to do them themselves, they should be prepared to engage a professional to complete the job as quickly as possible so that the closing may take place without delay. Working with your customer to plan a consultation and a time frame for the work to be performed, as well as any follow-up inspections, is one way you can assist enable this (if required).
4. Documents to Be Signed
During the transaction, the title company or attorney will deliver paperwork to your seller, most often by email. It is your responsibility to ensure that your vendor completes these paperwork on schedule. A declaration of identification (to check for any liens against the seller) or a payment request are examples of these things (a document sent to all lien holders to clear title).
Arrange a signing appointment for your seller once the buyer’s closing paperwork are ready to be signed. Make sure the title business sends you the seller’s estimate, which you should thoroughly verify before forwarding it to your seller. It’s usually a good idea to have this information before signing the closing agreements so you can make any necessary changes and address any further issues.
Because the paperwork will be notarized, inform your seller that they must produce acceptable identity at the time of signing, such as a current driver’s license or passport. Also, request that your seller have the account number or transfer instructions for where they want their money put on hand. Electronically wired monies will be accessible to the seller sooner than if they had to wait for a cheque to clear once their house closes and ownership is transferred.
If your customers have an impound account with their mortgage company, they should phone their lender to arrange a call. When the lender receives the final settlement amount, there will almost certainly be a balance that must be repaid to the seller. Because the seller will be relocating, double-check the lender’s forwarding address to ensure they get the payments.
5. Checklist for Moving
Give your vendor a relocation checklist to add to their value. Phone numbers for services that the seller may need to cancel on their property should be included on this list, such as:
- Water
- Garbage
- Electricity
- Gas
- Internet and cable
- Insurance
- Landscapers
- Controlling pests
After the buyer’s final walk-through, sellers may arrange the turn-off or transfer of ownership of services at their home using the closing timetable. It’s worth noting that if utilities are switched off before the walk-through, the purchasers won’t be able to certify that key components, such as power, water, or gas, are operational.
Pro tip: Make sure your sellers tell the post office of their new address so that mail is forwarded rather than sent to the new owners. If your seller agrees, you may offer the buyer the seller’s new address so they can inform them of any mail received to their old address.
In order to create place for the purchasers, your seller should also prepare and engage a moving firm to remove their stuff before closing. You are not responsible for setting up these services for them as their agent, but by giving them with these resources, you are presenting them with a complete transaction that will have them screaming your praises to others, who will then become potential client recommendations.
6. Buyer’s Final Inspection
Although the seller is generally not present for the final walk-through, you should be there as the seller’s agent to ensure the transaction runs properly. Notify your seller that three to five days before to closing, the buyer and their agency will need to walk the property.
The buyer will inspect the property to ensure that it is in the same condition as when they bought it and that any promised repairs have been executed. Before moving in, the buyer is likely to decide whether to have the home or flooring professionally cleaned, or whether to repaint, recarpet, or make other improvements.
It’s often a good gesture to have some information about the home’s peculiarities accessible to the buyer during the walk-through. For example, the seller may wish to leave a list of suppliers, such as landscapers and pool services, who may continue to serve the property.
7. Closing & Presenting Keys
Your seller has completed the procedure and the house is about to be closed. The buyer will take possession of the property now that ownership has been transferred. Your seller should make sure the house is spotless and ready for the new owners. Place the keys, garage door remote controls, and postal key in a kitchen drawer or on the kitchen counter. Instruction manuals for equipment, sprinkler or irrigation systems, and appliances should also be left on the counter by your vendor.
If the seller requests it, the title firm or attorney will submit the final seller’s estimate and/or deed so that the seller may shut their utilities. As the seller’s agent, you should have informed your client about any closing charges that must be paid after the transaction is completed to avoid any unpleasant surprises.
Remember to remove the property’s for-sale listing from any advertising sites you’re using, such as Zillow, Realtor.com, the local MLS, Craigslist, and so on. You should also edit your social media profiles, such as Facebook and Instagram, to reflect the sale of the house.
Most importantly, this is an excellent opportunity to congratulate your seller and confirm that you will be their real estate agent for the rest of their lives. Whether the transaction went well or you had to go through the wringer to get rid of this house, you can ensure a great experience by sticking to deadlines, being professional, and prepping your seller throughout the process.
Consider giving your customers a present as a way of congratulating them on the sale of their house. This will create a lasting impact, increasing the likelihood that they will sing your praises and suggest friends and family who are looking to sell a house to you. This might be a handwritten card followed with a congratulatory bouquet including a plant, a bespoke photograph, or a scrapbook documenting your selling process.
Use a service like EvaBot to deliver a bespoke gift from $20 to $1,000 directly to your client’s doorstep if you’re having difficulties settling on a closing present. Eva will speak with your seller to assess their preferences before delivering them a personalized gift with your logo. To learn more, visit their website:
EvaBot may be found on the internet.
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The “sample real estate closing documents” is a checklist that includes all of the necessary paperwork and information for both buyers and sellers. It also has an example of a sample closing statement.
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