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What is the closing process for a home sale?

The closing process for a home sale is the final stage, after the sales contract is signed, after the mortgage is finalized with the bank or other lender, and after the house is vacated and made available. It is a legal process between the buyer and seller, requiring an attorney, financing documents, and the various fees and payments. Closing is completed after the deed and title are transferred to the buyer. Copies of the financing documents and title insurance are given to the county recorder, as well.

The closing process involves paying some major fees, and they have to be figured in with the other costs of the mortgage, such as the monthly payments, attorney fees, realtor fees and lender fees. Lenders are required to give an estimate of closing costs within three days of your application, according to the Real Estate Settlement Procedures Act. In some cases, the lender's fees are negotiable, and sometimes the seller will pay some of the closing costs. The fee scales for lenders and realtors also vary, so that there is no one set price. Attorneys and third-party escrow holders are professionals that charge for their services.

Three categories of payments are the common parts of the mortgage closing process. First of all there is the cost of the loan; second are payments for transferring property ownership; and third are the taxes. Local state and government taxes vary depending on where you live. Total closing costs can run from between 3 to 6 percent of your total loan amount.