10 min read

How Does Closing on a House Work?

Written by May Ortega on October 27, 2025

Congratulations, your offer to buy a home was accepted! You're one step closer to getting the keys and moving in. But first comes a period called "closing,” and this guide will tell you everything you need to know about closing on a house.

Closing is the final step in a real estate transaction where the buyer's mortgage and down payment are used to pay the seller, and legal ownership of the property is transferred to the buyer. If it sounds complicated, don’t worry — Zillow has tools to simplify it for you.

Steps to closing on a house

The closing process involves a number of key steps and people to ensure all legal and financial requirements are met before the sale is finalized. The length of time this takes can vary, but a typical closing period is around 30 days. This process can vary by market, and there may be states or situations where an attorney is required.

Get your offer accepted

Once the seller accepts your offer, the closing process officially begins. In many places, the buyer gets to choose their title company. The title company oversees closing and holds all funds and documents in escrow. During this time, you will also be in the underwriting phase of your mortgage application.

Deposit earnest money into an escrow account

Depending on your market, your title company may also operate your escrow account. An escrow account holds all funds and documents related to the transaction. This protects both the buyer and seller.

Sometimes your escrow account is managed by a neutral, licensed third party (often an escrow company) who ensures all conditions of the contract are met before any money changes hands.

To show how serious a buyer is about purchasing a home, they may make an earnest money deposit. This money is normally paid by the buyer when their offer has been accepted, but before closing. The money is held in escrow until the sale is finalized. All earnest money goes towards the buyer’s down payment.

Conduct a home inspection

A home inspection is a thorough, professional review of the home's condition. The inspector checks the structure, major systems (plumbing, electrical, HVAC), and overall condition of the property. This is your chance to identify any issues and decide if you want to renegotiate the purchase price or ask the seller to make repairs. If you had an inspection contingency in your offer and it isn’t met (i.e. the roof has severe damage), you can walk away from the deal and get your earnest money back.

Get homeowners insurance

Before your lender will approve your loan, you’ll need to secure a homeowners insurance policy. This is required to protect both your interest and your lender’s interest in the property from things like fire, theft, and weather-related risks such as hail. You’ll need to show proof of the policy and pay for at least the first year of coverage either on or before closing day. And Zillow can help you learn more about what home insurance coverage can look like for your home.

Get the home’s appraisal

This is not the same as a home inspection, where a professional checks if the home has any defects. For a home appraisal, your lender will order one to determine the market value of the home. The appraisal protects the lender by ensuring the property is worth at least the amount of the loan. If the appraisal comes in lower than the purchase price, you may need to renegotiate with the seller or bring more cash to the closing table.

Title search is done and title insurance is bought

The title company performs a title search to ensure that the home’s title (the legal document proving ownership) is free of any liens (legal claims against the property for a debt), back taxes (property taxes or other government fees that are past due), or other legal issues. If any issues are found, they must be resolved before the sale can proceed. Buyers must pay for title insurance, and they have the option to purchase owner’s title insurance. Title insurance is a one-time purchase that protects the buyer’s financial interests if any title issues arise in the future, and it lasts as long as you own the home that the insurance is for.

Your loan is approved

This is where the mortgage underwriting process culminates. Once all the conditions of your loan have been met, your lender will give final approval to fund your home purchase. This is often referred to as "clear to close." You’re almost done!

Review your closing disclosure

The Closing Disclosure (CD) is a five-page document that outlines the final terms of your loan and all the closing costs. Federal law requires your lender to provide you with this document at least three business days before closing day. It is crucial to review this document carefully and compare it with the loan estimate you originally received from your lender. If these numbers don’t match, let your lender and agent know so they can track down the discrepancy and make sure the rest of your buying transaction goes smoothly.

Do the final walkthrough

A day or two before closing, you will do a final walkthrough of the home. This is your chance to make sure that the home is in the condition agreed upon in the purchase contract and that any agreed-upon repairs have been completed.

What to expect on closing day

As a buyer, you’ll need to bring a few things to ensure a smooth close. This is the big day where you sign all the final documents and make the home yours. This process involves a lot of paperwork, so expect to take between an hour and two hours to sign everything. Some deals may take even longer.

What to bring on closing day:

Photo ID: A driver's license or passport is needed to confirm your identity.
Bank account routing information: To pay for any down payment and closing costs you have. This information will let you wire the money over quickly and easily. Be aware of wire fraud scams if using this method.
Cashier's or Certified Check: If you’re not wiring the money over, bring this to cover any money you will owe. Your lender or agent will tell you the exact amount you need to bring.
Proof of insurance: Proof that you have the insurance in effect on closing day and a receipt showing you've paid the policy for a year.
Final purchase and sales contract: To double-check details against closing costs.

Documents you'll sign on closing day:

Closing Disclosure (CD): This five-page form details all the final loan terms, fees, and costs associated with the loan.
Promissory Note: This is your promise to repay the loan and includes the loan amount, interest rate, and payment schedule.
Mortgage or Deed of Trust: This document legally binds the home as collateral for the loan.
Title documents: These transfer the property’s title from the seller to you.
Escrow instructions: These authorize the escrow agent to disburse funds to the appropriate parties.

Tips for a smooth closing process

While you can’t control every part of the closing process, you can do a few things to help ensure it goes smoothly.

Avoid large purchases before closing

Your lender will review your credit and finances once more right before closing. Avoid making any large purchases, opening new lines of credit, or changing jobs. Any of these could change your credit score or debt-to-income ratio, jeopardizing your loan approval.

Do not change or quit your job

Having a consistent income is very important in this process, as your lender will need to know that you can pay back your home loan. Being able to provide recent pay stubs to prove you qualify for a loan is very important.

Double-check your Closing Disclosure

Take the time to review your Closing Disclosure thoroughly. If you find any discrepancies, bring them up immediately.

Submit ID and financial documents as soon as they’re requested

The faster you can provide documentation, the smoother the process will be. Staying organized and responsive can prevent delays, so keep these documents on hand.

Confirm your payee before you wire any funds

There are scams that target the home closing process, so make sure that the instructions you received for who to send your money to came from a verified party — ask by calling the number on your original documents, your lender, or your agent. If you’re closing with Zillow, you can call your dedicated closer directly.

Funding and recording

Once all documents are signed and your funds have been delivered, the lender releases the loan funds to the title company, who in turn gives all proceeds to the seller.

The title company then sends the new deed and other ownership documents to be recorded with the local government. Once this is done, you officially own the home. Congratulations!

How to protect yourself against home closing scams

Wire fraud is one of the fastest-growing threats in real estate. Criminals use emails with fake names that sound like real estate companies to trick buyers into sending their closing funds. Keep an eye out to avoid losing your money for closing.

Report suspicious activity

Stop and call your agent or lender if you receive suspicious wiring instructions.
Contact your bank and ask for a wire recall if you believe funds were sent to the wrong account.
File a report with Internet Crime Compliance, a secure government portal for online crime, if you believe you’ve been the victim of a closing scam.

Take precautions to avoid closing scams

Never trust wiring instructions sent via email.
Always call your title or escrow company using a verified phone number.
Do not use phone numbers from emails; they could be fake.
Verify bank details verbally, with a trusted party, before sending any money.
Be suspicious of last-minute changes or urgency in messages.
Set up two-factor authentication for your email account during the closing process to avoid any hacking.
Don’t email personal or financial information unencrypted.
Use secure communication, such as direct phone calls to a verified number.

FAQs about closing on a home

How long does it take to close on a house?: The average time to close on a house is typically between 30 and 60 days. This timeframe can vary depending on a number of factors, including the type of loan you’re getting, the complexity of the title search, and the responsiveness of all parties involved.
How much are closing costs on a house?: Closing costs typically range from 2% to 5% of the loan amount, but they can vary widely depending on where you live. They include various fees charged by your lender and other third parties, such as loan origination fees for processing the loan, title insurance to protect you and your lender from title disputes, escrow service fees, recording the deed fees, transfer taxes and prepaid costs.
Who needs to be present at closing?: The buyer, seller, and their real estate agents are typically present for an in-person closing. Other people involved — whether the closing is in-person or remote — include the closing service providers (such as a title company), the lender, and attorneys in states where they are required.
Can I sign my closing documents remotely?: In many cases, yes. Remote closing options have become increasingly common, and your ability to close from a distance depends on your state's laws and the specific requirements of your lender.
When do I get the keys to my new home once I’ve closed?: You typically get the keys to your new home on the day of closing, after all documents have been signed and the funds have been transferred. In some states or cities, you may not receive the keys until everything has been filed with the local government.
What should I wear to my home closing?: The most important thing is that you wear something that makes you comfortable on this important day. For many people, that means opting for "smart casual." Think nice jeans or slacks, a button-down shirt, a polo, a nice blouse, or a casual dress. If you want to be more professional, you could include a blazer. But you could even wear a t-shirt and jeans if that’s more your style.