· Real Estate · 5 min read
What Happens at a Real Estate Closing, Step by Step?
Closing is the last step, but most of the work happens in the weeks before. Here is the sequence from title search to recorded deed, and where deals stall.
A real estate closing is the moment ownership and money change hands, but almost everything that decides whether it happens on schedule occurs in the weeks before. The title search, the lender’s clear-to-close, the Closing Disclosure, and the final walk-through each have a deadline, and a miss on any of them pushes the date. Here is the sequence in the order it actually runs, with the points where deals most often stall.
Step 1: the contract sets the clock
Everything starts with the ratified contract. It fixes the closing date, the deposit, and the contingency deadlines for inspection, financing, and appraisal. In New York, the buyer’s and seller’s attorneys negotiate the contract before anyone signs it, and the deposit is paid on signing. In the District and Virginia, agents typically prepare the contract on regional forms, and the deposit goes to the escrow agent within a few days of ratification. From that point the buyer’s job is to clear the contingencies on time; our note on purchase contract contingencies explains how those deadlines work.
Step 2: title search and commitment
The settlement agent or title company orders a search of the public records and issues a title commitment, which lists what must be cleared before the insurer will issue a policy. Common items include payoff of the seller’s mortgage, release of an old lien that was paid but never recorded, estate paperwork where an owner has died, and judgments against the seller. The commitment also lists the exceptions the policy will not cover, and this is the document to review early. Our residential and commercial transaction counsel reads the commitment against the contract so that a title objection goes out before the deadline, not after. Our separate note on whether an owner’s title policy is worth buying covers the policy decision itself.
Step 3: financing and the clear-to-close
While title is being cleared, the lender orders the appraisal and works through underwriting conditions: income verification, source of funds, insurance binder, condo questionnaire. When those are satisfied, the loan is cleared to close. On a residential mortgage loan, federal rules require the lender to deliver the Closing Disclosure at least three business days before consummation. Certain late changes, such as a change in the loan product or an increase in the APR beyond the permitted tolerance, restart that three-day period, which is the most common reason a residential closing slips by a week. Commercial loans run on a commitment letter, and the lender’s counsel adds its own document list: entity authority, legal opinions, estoppels from tenants, and often a separate closing checklist.
Step 4: walk-through and closing figures
A day or two before closing, the buyer walks the property to confirm it is in the condition the contract requires, agreed repairs are done, and the seller’s belongings are gone. At the same time, the settlement agent prepares the settlement statement, which allocates the purchase price, loan proceeds, prorated taxes and association dues, seller credits, commissions, transfer taxes, and the title charges. Review every line. Then confirm the wire instructions by phone using a number you already have, not one from an email. Wire fraud targeting real estate closings is common and the money is rarely recovered.
Step 5: the closing table
Who sits at the table depends on the jurisdiction. In New York, the buyer’s attorney, the seller’s attorney, a representative of the title company, and often the lender’s attorney all attend, and the closing can take hours. In the District and Virginia, a settlement agent or title company runs the closing; Virginia law permits licensed non-attorney settlement agents, though the parties may still bring counsel. The buyer signs the promissory note, the deed of trust (in the District and Virginia) or mortgage (in New York), the Closing Disclosure, and a stack of affidavits. The seller signs the deed, an affidavit of title, the certification of non-foreign status (or arranges withholding if the seller is foreign; see our note on FIRPTA withholding), and the transfer tax returns. Funds are disbursed only when every condition is met, which is why some closings are done “in escrow,” with documents signed in advance and released when the lender funds.
Step 6: recording and post-closing
After signing, the settlement agent records the deed and the security instrument: with the Recorder of Deeds in the District, the circuit court clerk in Virginia, and in New York the county clerk, or the City Register through ACRIS within New York City. Transfer and recordation taxes are paid at that point. Only after recording does the title insurer issue the final policies, and only then are keys and possession released, unless the contract provides for a seller rent-back. Post-closing items can include escrow holdbacks for unfinished repairs, delivery of warranties and manuals, and the seller’s tax reporting on the sale.
Looking back over the whole sequence, the same handful of problems account for most delays: a Closing Disclosure change that restarts the three-day clock; a title defect found late because nobody read the commitment; an appraisal below the price with no plan for the gap; a condo or association package delivered late; and a wire that did not arrive because the sending bank held it for fraud review. Each is avoidable with a calendar and a checklist. Our contract negotiation team builds those deadlines into the agreement so the sequence has slack where it needs it.
If you have a closing scheduled and want someone reading the commitment, the Closing Disclosure, and the settlement statement before you sign, a consultation with Capitol Law Partners can put that review in place. Schedule a consultation.
This article is for informational purposes only and does not constitute legal advice. No attorney-client relationship is formed by this communication.
Attorney Cagatay Ersoy. Practical strategy for founders, investors, and growing companies.
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