Closing day is often viewed as one of the most important days for real estate investors because it is the day that everything finally comes together.

But what exactly is a real estate closing? And what do you need to do to prepare?

Let’s dive into the process of closing a real estate deal and what you need to know about the process.

What is Real Estate Closing?

A real estate closing, also known as the settlement or completion, is the final step of a real estate deal. This is the stage where financing is finalized, and the property ownership is transferred from the seller to the buyer.

What Closing Costs Can You Expect?

Before a deal closes, consider closing costs and how those will impact the total cost of buying or selling a property.

As a buyer, the main closing costs you can expect to pay will be any lawyer fees, appraisal costs and potentially a fee to your mortgage agent, depending on the type of mortgage product you will go with. (However, most mortgage products from a good mortgage agent will come without fees.)

As a seller, there are far more costs you will need to consider. First, you will need to consider the taxes associated with selling a property and the commission you need to pay your selling agent. Also, sellers will need to consider the fact that they will likely need to pay off any existing mortgage balance and any associated fees.

Finally, as a seller, you may have some pre-closing costs in the form of last-minute repairs, replacements or staging products to make the property more appealing.

Following the Real Estate Closing Process

While the finer details of the closing process may look different across different real estate deals, the closing process can usually be broken down into four main steps. These steps are:

Order Opening

During the order opening period, the lender or realtor will order the closing, and a settlement agency will contact all parties involved in the deal.

Then, important documents such as the title search, title commitment and closing protection letter (CPL) are issued and prepared.

If the property is closed in escrow, this is also when the escrow account is opened.

Closing Preparation

This is the stage when any remaining title issues are sorted out and resolved, and the final closing package is prepared and delivered to be reviewed before signing.

During the days before closing, these documents are delivered to all parties and the settlement agency reviews that the amount of money in escrow or set aside matches the agreed-upon purchase price.

Closing Day

On closing day, the buyer and seller sign all the documents that make up the closing package.

This is also often when the seller delivers possession of the property to the buyer. While this is legally done by transferring the property title to the buyer, the seller or their agent will often also deliver the keys to the property to mark possession and transfer to a new owner.


After the closing day, the closing documents are entered into the record and title insurance is issued.

Also, on the financial side, the mortgage loan is funded once the funding date arrives, and any funds held in escrow are distributed once the disbursement date is reached.

If You Are Ready to Invest

If you are ready to begin investing, it is essential to start preparing yourself for your deals as early as possible to be ready for a smooth and easy closing process. This means doing what you need to do to line up details, such as financing, as effectively as possible to ensure you are not rushing towards the end.

So, if you want to begin securing the best available financing for your next real estate investment, click the link below for a free strategy call with our mortgage team at LendCity.

Use Closing As Your Opportunity to Negotiate & Save Money