What Is the Closing Date, and Why Does It Matter?

What Is the Closing Date, and Why Does It Matter?
Clint Edwards
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Your closing date is the final step in your home purchase, but it is set at the start of your real estate transaction. Setting the right date for your closing can make everything easier when it comes time to get ready to move into your new home.

What Happens on the Closing Date?

Your closing date is the day your transaction officially closes and is recorded with the county. All funds are transferred to the appropriate parties and the deal is done. By this point all of your closing costs and down payment have already been put in escrow. Don’t expect the closing date to be the day you pay everything as this will cause a delay. Have the funds ready and available for transfer a few days ahead of the closing date.

Setting a Closing Date

There are a lot of factors which should be considered when setting your closing date:

Contract Timeline

Most people set a closing date 30-45 days from the offer date. However, there are additional factors to consider, so don’t just count off 30 or 45 days and mark an X on your calendar. Choosing a realistic timeline can help everything go smoothly and be done with less stress.

In a competitive market buyers will often find themselves having to shorten the timeline of closing in order to get an offer accepted. In the event you plan on making offers on homes with multiple bidders you may find yourself having to close in under 30 days. While this is possible, you want to make sure you have a lender that can accommodate a quick closing. You also want to make sure you’ve done as much as possible and provided everything you can during the preapproval process so that you’re not scrambling to provide all the documentation during the loan process.

One of the most common delays when trying to close quickly is the appraisal. If you make an offer with a shorter timeline be prepared to authorize the appraisal even before the results of your home inspection is complete. The potential downside is the appraisal is paid whether the loan closes or not and if you back out of the deal because of issues found during the home inspection you could be out the appraisal cost.

Date of occupancy

If the home sellers need extra time to move, you may arrange to close and allow them to pay rent until their official move out date which is called a rent back. The date of occupancy should be specified on your purchase contract but don’t expect to move in on the day your transaction closes. This often occurs 1-3 days after closing. Ideally you want to give yourself a buffer prior to lining up the moving vans in case there are unexpected delays. A real estate transaction has a lot of moving parts and unforeseen issues can arise so plan ahead and reduce the stress of buying a home wherever possible.

When Do I Get the Keys to My House?

You’ve successfully purchased a new home – so, when do you get the keys?

Typically, you’d assume you’ll get the keys to your new house at closing, but there are a few things that have to happen before everything is official. Here’s what has to happen before you get your keys:

Document signing

In many cases, you and the seller will have different appointments to sign closing documents. Even if you’ve signed yours, if they haven’t competed theirs yet the deal isn’t done yet. Find out when they are completing their share of the work before you count on getting the keys to your new home.

Generally the seller will sign their documents prior to the buyer as there are fewer moving parts and no lender involved on their side. The Purchase and Sale Agreement in most states specifies a specific date of closing. If all parties have signed and everything is completed it is possible to close prior to the date on the contract provided both parties agree.

Funds transfer

Typically, all monies need to be transferred before you can get the keys to your new home. If there is a delay with your mortgage, you don’t have all of your closing costs, or there’s a delay in wiring your down payment, then you may not be able to complete everything associated with closing.

This is why it is so important to have all of your ducks in a row and to have already confirmed with your bank and your lender what day funds can be quickly transferred to complete the purchase.

Title deed recording

The title transfer must also be complete, or the seller runs a big risk by letting you have the keys before everything is finished. If you started moving in and the deed is still in their name, they could be liable if you fell off of a ladder hanging a picture over the mantle in “your” new home.

Make sure everything is in order and that there is time for the title deed transfer to be recorded with the county before you schedule your moving truck.

Getting your keys faster

You can help improve your chances of receiving your keys at closing by trying to get your appointment for closing first thing in the morning on a weekday. This allows more time before the end of business for funds to clear, titles to be recorded, and so on.

In many cases, delays in getting keys are due to things not being finalized until the next business day, If you’re closing late in the day, on a Friday, or before a long holiday weekend, you could be left stewing in frustration waiting to get into your new home.

At any rate, don’t sweat the small stuff. Soon you’ll have closing behind you, your keys in hand, and be able to move in and begin your journey as a newly minted homeowner.

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