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You found the house, negotiated the price, and the seller accepted your offer, so what happens next?
Many buyers think the hard part is over once the contract is signed. In reality, the period between contract and closing is one of the most important stages of the homebuying process. This is when inspections happen, financing gets finalized, paperwork moves quickly, and any last-minute surprises can appear.
Having a clear contract to close checklist can help you stay organized, avoid delays, and ensure that everything goes smoothly before you finally receive the keys to your new home.
Let’s walk through the essential steps every homebuyer should follow after signing a purchase agreement.
1. Submit the Earnest Money Deposit
After the purchase agreement is signed, buyers must submit the earnest money deposit. This deposit proves to the seller that the buyer is serious about completing the purchase. The funds are typically held in an escrow account by a title company or brokerage until closing.
Most contracts require the deposit to be submitted within a short period, often within one to three days after signing. The amount is later applied toward the buyer’s down payment or closing costs. Ensuring the deposit is submitted on time is crucial because failing to meet the deadline could potentially violate the terms of the agreement.
2. Schedule the Home Inspection
A professional home inspection helps buyers understand the true condition of the property before moving forward with the purchase. Inspectors carefully examine the home and identify structural issues, safety concerns, or maintenance problems that may not have been visible during the initial showing.
The inspection typically evaluates several major components of the home, including:
- Roof condition and structure
- Plumbing and water systems
- Electrical wiring and panels
- Heating and cooling systems
- Foundation and structural integrity
Once the inspection report is received, buyers may request repairs, negotiate a credit, or proceed with the purchase if the property is in acceptable condition.
3. Finalize Your Mortgage Application
If you are using financing to buy the home, your lender will begin the underwriting process after the contract is signed. This process involves verifying your financial information to ensure you qualify for the loan.
Lenders typically review employment history, income stability, debt levels, and credit score. During this time, buyers may receive requests for additional documentation. Providing these documents quickly helps keep the process on schedule and reduces the chances of delays before closing.
Note: Working with a trusted mortgage provider like Altgage can simplify the contract-to-close process. With affordable and standard mortgage options, Altgage helps buyers secure financing smoothly while staying on track for a timely closing.
4. Order the Home Appraisal
The lender usually orders a professional appraisal to confirm that the home’s value matches the agreed purchase price. The appraiser evaluates the property's condition, features, and location while also comparing it to recent sales of similar homes in the same area.
If the appraisal value comes in lower than the purchase price, the buyer and seller may need to renegotiate the terms. In some situations, buyers may increase their down payment or challenge the appraisal if strong comparable sales exist.
5. Secure Homeowners Insurance
Before closing, buyers must obtain homeowners' insurance coverage. This policy protects the property against risks such as fire, natural disasters, theft, or other unexpected damages.
Lenders require proof of insurance because the home acts as collateral for the mortgage. Buyers usually compare multiple insurance providers to find a policy that offers the right balance of coverage and affordability before submitting the documentation to the lender.
6. Title Search and Title Insurance
A title company conducts a detailed title search to verify that the seller legally owns the property and that there are no unresolved legal claims attached to it. This step ensures that buyers are receiving clear ownership of the home.
The title search typically checks for issues such as unpaid taxes, liens, or ownership disputes that could affect the transfer of property. Buyers also commonly purchase title insurance to protect themselves from future claims related to past ownership problems.
Check out: What is Title & Escrow
7. Remove Contract Contingencies
Real estate contracts often include contingencies that protect buyers during the transaction. These clauses allow buyers to exit the agreement if certain conditions are not met.
Common contingencies that must be satisfied before closing include:
- Financing contingency confirming loan approval
- Inspection contingency related to property condition
- Appraisal contingency verifying the home’s value
- Home sale contingency if the buyer must sell another property
Once these conditions are satisfied, buyers formally remove the contingencies, which means the purchase agreement becomes fully binding.
8. Review the Closing Disclosure
A few days before closing, the lender provides a closing disclosure document. This document outlines the final financial details of the mortgage, including the interest rate, monthly payment, and total closing costs.
Buyers should carefully review the disclosure to ensure all figures are accurate and consistent with the earlier loan estimate. By law, lenders must provide this document at least three business days before closing so buyers have enough time to review it and ask questions if necessary.
9. Conduct the Final Walkthrough
The final walkthrough typically happens one or two days before the closing appointment. This is the buyer’s last opportunity to confirm that the home is still in the agreed condition.
Buyers verify that repairs requested after the inspection were completed and that all fixtures and appliances included in the agreement remain in the property. If any issues are discovered, they are usually resolved before the closing documents are signed.
10. Prepare Funds for Closing
Before the closing appointment, buyers must arrange the remaining funds needed to complete the purchase. This amount generally includes the down payment, closing costs, and prepaid expenses such as property taxes or homeowners' insurance.
Funds are typically transferred through a secure wire transfer or delivered as a cashier’s check. Buyers should always verify wiring instructions directly with the title company to protect themselves from potential fraud.
11. Sign the Closing Documents
Closing day is when the final legal paperwork is completed. Buyers sign multiple documents related to the mortgage agreement, property ownership, and financial settlement of the transaction.
This process usually takes place at a title company or attorney’s office, although some transactions allow remote or digital closings depending on local regulations. Once all documents are signed and funds are transferred, the sale is officially recorded.
12. Receive the Keys to Your New Home
After the transaction is recorded with the local county office, ownership of the property officially transfers to the buyer. At that moment, the home becomes yours legally.
Receiving the keys marks the final step of the journey, from signing the contract to completing the purchase of your new home.
The contract-to-close period may feel overwhelming, especially for first-time homebuyers, but staying organized can make the process much smoother. Each step, from inspections and loan approval to reviewing documents and preparing funds, plays an important role in ensuring the transaction moves forward without complications.
By following a clear contract to close checklist, buyers can avoid delays, stay ahead of deadlines, and approach closing day with confidence. With the right preparation and guidance, the final step becomes simple: walking into your new home and starting the next chapter of your life.
FAQs
How long does the contract-to-close process take?
The contract to close timeline usually takes 30 to 45 days, although it can vary depending on loan approval, inspections, and appraisal timelines.
What can delay closing on a home?
Closing delays can happen due to financing issues, low appraisal values, incomplete documentation, title problems, or repair negotiations after the home inspection.
What happens during the final walkthrough?
During the final walkthrough, buyers confirm that the property is in the agreed condition and that any requested repairs have been completed before closing.
Can a buyer back out after signing the contract?
Yes, buyers may be able to cancel the purchase if contingencies such as financing, inspection, or appraisal are not satisfied within the specified timeframe.
