Steps to a Residential Real Estate Closing

Couple shaking hands with realtor. House for sale/ sold sign.

Purchasing a new house or condo is an exciting experience — and if you’re a first-time home buyer, you might be wondering what to expect during the course of the real estate closing process. Critically, there are several steps in a Florida real estate transaction before you even get to the closing table. It’s crucial that each step be carried out carefully and diligently to avoid any issues that could potentially arise. A skilled Florida Real Estate attorney can guide you through the process.

Here are the steps that must be taken by buyers in a real estate transaction prior to a Florida real estate closing:

1. Enter into a Contract

The foundation of any real estate transaction is the contract. Once it has been signed, the contract is a legally binding agreement between the buyer and seller that sets forth the terms and conditions of the sale. In addition to identifying the parties and the property, it also states the purchase price, closing date, and other details.

2. Make a Deposit of Earnest Money

After the contract has been executed, the buyer is required to deposit their earnest money into an escrow account. Escrow money represents the buyer’s good faith to buy the home. Specifically, it shows that you are serious about your intention to purchase the property.

3. Apply for a Home Loan

A buyer will usually need to obtain a home loan to finance their purchase. However, it’s important to be aware that the process of applying for a home loan has many steps. You must provide proof of income, complete your application, and obtain a title insurance policy. After the loan has been approved, you will receive a commitment letter from the lender outlining the terms of the loan and the mortgage agreement. The lender will also provide a closing disclosure that specifies the terms of the loan, the closing costs, loan costs, a breakdown of your payments, and other information.

4. Have an Appraisal of the Property Conducted

Notably, lenders will always require an appraisal of the property to determine its fair market value. An appraisal is conducted by a licensed third-party who inspects the property and researches the price of comparable homes that have recently sold nearby. In assessing the value of the home, an appraiser will look at the overall structure, condition and size compared with others in the area, and the age of the home. Other factors that can impact an appraisal include signs of water damage, renovations or improvements made, and signs of pest infestation.

5. Have the Property Inspected

In addition to an appraisal, the buyer must inspect the property to ensure there are no defects. If serious issues are revealed during the property inspection, a buyer can back out of the sale or renegotiate the price with the seller. A home inspector will look at interior and exterior parts of the home, including the foundation, fixtures, plumbing, and electrical system. Property inspections are particularly important in Florida where the climate and weather conditions can increase the risk of structural damage.

6. Obtain Title Insurance

Title insurance protects buyers and lenders from any financial losses they might experience due to liens, encumbrances, or defects in the title to the property. Significantly, a missing deed or lien on the property could result in a number of costly legal issues. Purchasing title insurance is not only required by most lenders, but it can also ensure you are safeguarded from any undiscoverable defects in the chain of title.

7. Conduct a Survey

Although not required under Florida law, a property survey will typically be required by a lender. This determines land boundaries and ensures they conform to the legal description in the public record. A survey can also reveal any encroachments that adversely impact your ownership.

8. Obtain Wind, Hazard, and Flood Insurance

Wind, hazard, and flood insurance are not legally mandated in Florida. However, it’s vital to make sure all necessary policies are purchased to ensure your investment is protected. Additionally, some lenders may require you to purchase certain types of insurance, depending on the location of the property — such as whether it is in a coastal area.

9. Conduct a Preclosing Inspection

Before the closing date, it is essential to conduct a final walk-through of the home. This is to ensure that the property is in good condition and the seller has vacated. At this time, you should also check that all fixtures or appliances included in the contract are in place, and any agreed-upon repairs have been made.

10. Execute the Closing Documents

The final step in the real estate process is the closing. This involves executing several vital documents, including the warranty deed, the closing affidavit, as well as the note and mortgage. Once all necessary documents in the loan package have been signed and money is exchanged, ownership of the property is transferred from the seller to the buyer.

Contact an Experienced Florida Real Estate Closing Attorney

The real estate closing process can be stressful and overwhelming. It’s best to have a skilled attorney who can guide you every step of the way. At Waugh PLLC, we offer high-quality legal services to buyers and sellers for Florida real estate closings and a wide variety of real estate matters. We welcome you to contact us at or call (321) 800-6008 to learn how we can assist you.

Categories: Real Estate Law