Closing on a home is the final—and often the most important—step in a real estate transaction. For both buyers and sellers in Scottsdale, understanding the closing process is essential to ensuring a smooth and successful experience. This guide explains everything you need to know about closing, from key milestones to tips for avoiding delays.
Understanding the Closing Process: What Scottsdale Buyers and Sellers Need to Know
The closing process involves transferring ownership of a property from the seller to the buyer. It’s a critical phase where legal, financial, and logistical steps must be completed. For buyers, it’s the moment they officially own their new home. For sellers, it’s when they receive payment and transfer their obligations. This guide explains the following:
- The timeline of the closing process
- Key steps for buyers during closing
- Key steps for sellers during closing
- Common challenges and how to avoid delays
- What to expect on closing day
Here’s a closer look at each.
The Timeline Of The Closing Process
The closing process typically takes 30 to 60 days from the time an offer is accepted to the closing day. However, this timeline can vary depending on factors like financing, inspections, and appraisals.
- Offer Acceptance: Once the seller accepts an offer, both parties sign a purchase agreement outlining terms such as price, contingencies, and closing date.
- Escrow Opened: An escrow account is established to hold funds and documents until closing. The buyer typically deposits earnest money into this account.
- Inspections And Appraisals: The buyer conducts a home inspection to assess the property’s condition. If the transaction involves a mortgage, the lender orders an appraisal to confirm the home’s value.
- Contingency Resolution: Any contingencies outlined in the contract, such as financing or repairs, must be resolved before closing.
- Loan Approval: The buyer works with their lender to finalize the mortgage, including underwriting and securing loan approval.
- Title Search And Insurance: A title company performs a title search to ensure the property is free of liens or legal issues. The buyer typically purchases title insurance for added protection.
- Final Walkthrough: The buyer conducts a final walkthrough to confirm the property’s condition matches the agreement.
- Closing Day: Both parties meet to sign documents, transfer funds, and finalize the transaction.
Understanding this timeline helps both buyers and sellers prepare for each step and anticipate potential challenges.
Key Steps For Buyers During Closing
For buyers, the closing process is about securing financing, confirming the property’s condition, and ensuring all legal and financial requirements are met. Here’s what buyers need to focus on:
- Secure Financing: Work closely with your lender to complete the mortgage process. Provide all required documentation promptly to avoid delays.
- Conduct Inspections: Hire a professional home inspector to evaluate the property. If issues are found, work with your REALTOR® to negotiate repairs or credits with the seller.
- Order An Appraisal: If you’re using a mortgage, the lender will require an appraisal to confirm the property’s value. Be prepared to cover the appraisal fee.
- Review The Closing Disclosure: At least three days before closing, you’ll receive a Closing Disclosure outlining the loan terms, monthly payments, and closing costs. Review it carefully to ensure accuracy.
- Purchase Homeowners Insurance: Most lenders require proof of homeowners insurance before closing. Shop around for a policy that provides adequate coverage.
- Complete The Final Walkthrough: Visit the property one last time to ensure any agreed-upon repairs are completed and the home is in the expected condition.
Staying organized and proactive throughout the process can help buyers avoid last-minute surprises and ensure a smooth closing.
Key Steps For Sellers During Closing
For sellers, the closing process involves meeting their obligations, such as disclosures, repairs, and transferring ownership. Here’s what sellers need to focus on:
- Fulfill Disclosures: Provide the buyer with all required disclosures about the property, including any known defects or issues.
- Address Repairs: Complete any repairs agreed upon during negotiations. Keep records of the work to provide to the buyer if needed.
- Coordinate With Escrow: Work with the escrow company to provide necessary documents, such as the deed and proof of ownership.
- Review The Closing Statement: The escrow company will prepare a closing statement outlining the transaction details, including the final payout to the seller. Review this document carefully for accuracy.
- Prepare For The Final Walkthrough: Ensure the property is clean and any agreed-upon repairs are completed before the buyer’s walkthrough.
- Transfer Utilities: Arrange to cancel or transfer utilities as of the closing date to avoid unnecessary charges.
By staying on top of these steps, sellers can ensure a seamless transfer of ownership and avoid disputes with the buyer.
Common Challenges And How To Avoid Delays
The closing process can encounter challenges that delay or complicate the transaction. Being aware of these potential issues can help both buyers and sellers take steps to avoid them:
- Financing Issues: Buyers should get pre-approved for a mortgage before making an offer and avoid making major financial changes during the closing period.
- Inspection Problems: For sellers, addressing repairs proactively can prevent delays. Buyers should be prepared to negotiate if issues arise.
- Title Issues: Title searches sometimes uncover liens or legal disputes. Sellers should ensure the title is clear before listing the property, and buyers should purchase title insurance for protection.
- Last-Minute Changes: Both parties should review all documents carefully to avoid last-minute surprises. Communication with your REALTOR and escrow officer is key.
Proactively addressing these challenges can keep the closing process on track and prevent unnecessary stress.
What To Expect On Closing Day
Closing day is the culmination of the entire process, where the buyer receives the keys and the seller transfers ownership. Here’s what typically happens:
- Document Signing: Both parties sign various documents, including the deed, loan agreement, and settlement statement. Buyers should bring a government-issued ID and any required funds.
- Transfer Of Funds: The buyer wires the remaining funds to the escrow account, and the seller receives payment.
- Title Transfer: The title company records the deed with the local government, officially transferring ownership to the buyer.
- Key Exchange: Once everything is finalized, the buyer receives the keys to their new home.
Closing day is a significant moment, and your REALTOR will guide you through the process to ensure everything goes smoothly.
FAQ About The Closing Process
Check out these commonly asked questions about the closing process. If you don't see your question here, please call our office and we’ll find you the answers you need.
How Long Does The Closing Process Take?
The closing process typically takes 30 to 60 days, but it can vary based on factors like financing and inspections.
Who Pays Closing Costs In Scottsdale?
Closing costs are usually split between the buyer and seller. Buyers often cover loan-related costs, while sellers typically pay commissions and title fees.
What Happens If The Appraisal Comes In Low?
If the appraisal is lower than the purchase price, buyers can negotiate with the seller to lower the price, cover the difference themselves, or walk away if contingencies allow.
Can I Back Out Of A Deal During Closing?
Buyers and sellers can back out under certain conditions outlined in the purchase agreement, such as unresolved contingencies or financing issues.
What Should I Bring To Closing?
Buyers should bring a government-issued ID, proof of homeowners insurance, and any required funds. Sellers should bring keys, garage door openers, and any documents requested by escrow.
The closing process is the final step in buying or selling a home, and understanding each phase is essential for a smooth experience. By working with an experienced REALTOR, staying organized, and addressing potential challenges proactively, you’ll navigate the closing process with confidence and success.
Are You Buying or Selling a Home in Scottsdale?
If you’re selling a luxury home in Scottsdale, we can help. You can use our home value calculator to get a ballpark idea on what your home may be worth – and you can call us at 602-694-3200 to talk to a REALTOR® about how we can market your home to all the right buyers.
If you're also looking for a new home, we’ll be happy to show you the homes that interest you most. While you’re here, explore all our Scottsdale real estate listings or look in specific communities:
- Ancala homes for sale
- Boulders homes for sale
- Cactus Corridor homes for sale
- Scottsdale Country Club homes for sale
- Scottsdale Ranch homes for sale
- Old Town Scottsdale homes for sale
- Paradise Valley homes for sale
Don Matheson
REALTOR® | Founder
The Matheson Team
RE/MAX Fine Properties
21020 N. Pima Rd., Scottsdale, AZ 85255
602-694-3200
[email protected]
