What Happens on Closing Day? A Seller’s Step-by-Step Guide

If you’re selling your home, closing day is the final—and most important—part of the home selling process. It’s when ownership of the home officially transfers to the buyer, and you receive the proceeds from the sale. But what exactly happens on closing day?

Let’s walk together through every step from a seller’s point of view, including wiring closing funds (if needed), signing documents with the closing attorney, the buyer’s loan funding (if applicable) and the consummation of the sale.

Step 1: Final Prep for Closing Day

Before closing day arrives, your real estate agent, the buyer’s lender and the closing attorney work behind the scenes to prepare everything needed. Here’s what you should expect to review before closing:

Closing Disclosure: This document lists all the financial details, like the sale price, closing costs, and how much money you’ll receive from the sale.
Settlement Statement: This breaks down where every penny goes, including agent commissions, loan payoffs, and taxes.

You may have heard of a HUD-1 Statement that were used in the past. The Closing Disclosure (CD) and Settlement Statement (ALTA-American Land Title Associate) have taken the place of the HUD-1 Statement. Review these documents carefully. Your agent will explain anything that is unclear.

Step 2: Wiring the Closing Funds (If Needed)

As the seller, you don’t usually bring money to the table—instead, you’re the one getting paid! However, if you have any fees to cover, like unpaid property taxes or mortgage payoffs that exceed your home’s value, you may need to wire funds to cover the difference.

The closing attorney or escrow officer will give you the exact amount, wiring instructions, and timing. It’s critical to follow these instructions precisely to avoid delays. Always confirm wiring details directly with the attorney’s office to prevent wire fraud—a growing concern in the residential closing process.

What happens on closing day or maybe a day or two preceeding for the buyer includes wiring the monies to the closing attorney to cover the loan downpayment and any purchase expenses that are not covered in the loan. That is unless they are paying cash, in which case, all of the purchase funds are wired by the buyer prior to closing.

Step 3: Arriving at the Closing Location

On closing day, you’ll head to the closing location, which could be a real estate attorney’s office, the closing attorney’s office or another approved location. Bring a valid photo ID, a secondary form of identification, and if required, any certified funds (if not wired) you were instructed to bring. Your real estate agent should be there to support you.

Expect the closing to take about an hour, but it can be quicker or longer depending on the situation.

Step 4: Signing the Seller’s Closing Documents

At the closing table, the closing attorney will walk you through the documents you need to sign. From the seller’s point of view, these documents include:

Deed: This transfers ownership of your home to the buyer.
Settlement Statement (HUD or ALTA): This shows the final numbers of the sale, including what you’ll receive.
Affidavit of Title: This confirms you have the right to sell the property and that there are no undisclosed issues.
Bill of Sale: If you’re leaving appliances or personal property, this document transfers ownership to the buyer.
Seller’s Closing Affidavit: This might include statements about liens, repairs, or legal matters related to the property.

The closing attorney will explain each document, and your agent will be there to answer any last-minute questions.

Step 5: Buyer’s Side – Loan Funding and Final Steps

While you’re signing documents, the buyer is also busy signing their loan documents. Their lender is preparing to fund the loan. This means that once the signed documents have been reviewed and approved by their closing department, the lender wires the purchase funds into the to the closing attorney’s IOLTA account (Interest on Lawyers Trust Account). This is one of the most critical moments of the residential closing process.

Once the lender’s funds arrive, the closing attorney confirms the funds have cleared. This means everything is ready to consummate the closing—that is, to make the sale official and complete.

Step 6: Disbursement of Funds

After confirming the buyer’s loan funds have arrived and cleared, the closing attorney starts the disbursement process. Here’s what happens next:

The mortgage on your home is paid off with the sale proceeds.
The closing attorney pays real estate commissions, taxes, and any other closing costs.
The remaining money—the net proceeds—are transferred to you, the seller. This may be done by wire transfer or by issuing a check, depending on your preference and timing.

Your agent and the closing attorney will coordinate to ensure you get your funds as soon as possible.

Step 7: Handing Over Possession of the Home may be the most exciting part of what happens on closing day!

Once the residential closing is complete and all funds are transferred, it’s time to hand over the keys. The exact timing depends on the purchase agreement, but

typically, possession transfers immediately after closing. Your agent may hand the keys directly to the buyer or their agent, or you may leave them at the property if arranged beforehand.

Make sure you’ve removed all personal belongings and cleaned the home. The buyer expects to receive the property in the condition agreed upon in the contract.

Step 8: Recording the Deed

One of the final steps in the home selling process is the recording of the deed. The closing attorney submits the signed deed to the local county recorder’s office. Once recorded, the buyer’s name becomes the official owner in public records.

For the seller, this is the last formal step in the residential closing. At this point, your legal obligations for the property are fulfilled.

Step 9: Celebrate!

Congratulations! You’ve officially completed the residential closing process and successfully sold your home. Whether you’re moving to a new house, downsizing, or relocating for work, this is a big milestone.

Tips for a Smoothly Traversing What Happens on Closing Day

Stay in communication: Regular updates from your agent and closing attorney help avoid surprises.
Bring necessary documents: Valid ID, any required funds, and any missing paperwork.
Understand the numbers: Review the Settlement Statement and Closing Disclosure before closing.
Be flexible: Occasionally, delays in loan funding or last-minute issues can arise. Having a little patience can make a big difference.

Key Takeaways

Closing day is the final step in the home selling process and the residential closing.
You’ll sign documents like the deed, Settlement Statement, and affidavits.
The buyer’s loan funds the purchase, and the closing attorney disburses the money.
Possession of the home transfers to the buyer, and the deed is recorded.
Celebrate your successful residential closing!

If you’re preparing to sell your home and have questions about what happens on closing day, I’m here to help. Reach out for expert guidance on the residential closing process and every step of the home selling process.