Steps Between Signing And Closing On A Home

From the day the Seller and Buyer sign the purchase agreement, to the day the Buyer gets their keys usually takes about 30 days. Here's a timeline of everything that happens.

Once the buyer and seller have both signed a purchase agreement, you are now "under contract".

On the first day:

The signed documents are immediately sent to a neutral third party referred to as the Title Company. They go by names like Alamo Title, Stewart Title, Key Title etc.

Within the first 3 days:

Inspection: We order the inspection and get it done ASAP. This will give you a good idea of the condition of the home. Typically we can get an Inspector there within 3 days. An Inspector I recommend in San Antonio is Pillar To Post. They will write the inspection report from the home and send it before they even leave the property.

Buyer sends a check to the Title Company for 2 things: The Option Money and the Earnest Money.

Option Money - Usually between $100-$250. It buys you the option to walk away from the deal within a certain number of days, typically the first 10 days. This is called the Option Period. Explained further below.

Earnest Money - Usually 1% of the home's sales price. Think about this as a deposit. 2 things can happen to this money. When you sign for your keys around day 30 of the process (called Closing Day), this money gets applied to your closing costs and the price of the home. However, if you pull out of the contract outside one of the many windows you have to do so, the seller can keep your Earnest Money as damages.

Within the first 10 days:

Option Period: Think of this as the "Opt Out Period". It's a protection for you to make sure that you get a home without major defects. During this time you get a professional Inspection done. If it needs repairs, now is the time to negotiate more money off the sales price, have them make the repairs or if you can't come to an agreement, you can call off the deal. If this happens you get your Earnest Money (equal to 1% of the purchase price) but the Seller always keeps the Option Money. During this time you can back out of the deal for any or no reason at all. The Option Period can be any number of days.

The remaining 20 days:

Title Inspection: The Title Company researches the home's Title documents to make sure that the Seller does not have any tax liens or other issues that could hold up the sale.

Title Insurance: This is a one time purchase from the Title Company. Either the Seller or Buyer purchases this and the money is deducted at closing. Title Insurance rates are set by the state of Texas so they are the same prices regardless of which Title Company you are using.

Survey: This is a map with the measurement of the home's boundaries, fence lines, shed footprints, pool location, etc. The Title Company orders and reviews the Survey. They either accept or decline it. I've seen home purchases get delayed because a shed was built too close to the fence. Sometimes a fence was built 3 inches into another person's property. There could be a dispute as to who actually owns the driveway. That's a wild one but that really happened to one of my buyers.

Appraisal: The lender will send in an appraiser to put a value on the home. A mismatch between a home’s appraised value and the purchase price could impact how much your lender allows you to borrow for your mortgage. If the appraisal comes in lower than the sales price, you may have the option to negotiate the price again or back out of the deal.

Home Insurance: Lenders may require that you purchase homeowners insurance. You might also consider other types of insurance such as flood or title insurance. If your down payment is less than 20%, you may be required to have mortgage insurance as well.

Utilities: Buyers make sure to call the utility companies and notify them of the move.

HOA Documents: If the home is in a Homeowners Association, the association documents are provided to the Buyer.

Mortgage Company: They are working behind the scenes to get the loan funded. Even though you may have been prequalified for the loan, now they actually get you approved.

3 Days Prior to Closing Day

Closing Disclosure: This is provided to Buyers and Sellers and shows exactly who paid for what, how much and the final closing costs for each side. If you are the Seller it will tell you your net gain which will be deposited into your bank account on the day of closing.

Wire Your Closing Costs: You are going to wire your closing costs from your bank. Your mortgage company will send you instructions on how to do this.

"Clear to Close": Your agent is notified that we got the "Clear to Close". It's a big day because it means you can sign your final documents and get your keys. Although the official closing date was agreed to in the original documents, if everyone wants to close earlier and we're clear to close, let's do it.

It's Closing Day!

What happens at close?:    Sellers and Buyers set up separate appointments to show up at the Title Company's building. During the closing appointment you will hand sign notices and final documents. If you didn't wire your closing costs, you will bring a cashiers check with you.

Closed and Funded!: After everyone signs, it could take a couple of hours for the Title Company to notify everyone that the deal is closed and funded. Buyers have officially taken ownership of the property and the Seller has their net proceeds.

House Warming Party: Don't forget to invite your beloved Real Estate Agent! Congratulations, you did it.