Texas Closing Checklist Every New Homeowner Should Know

May 28
4 min read

Real Estate Closing Checklist

Whether you are purchasing your first home or your next real estate investment, closings can be a nerve-racking process. There are many factors that come into play to successfully close on a property. We have created a checklist to help ensure your closing goes as smoothly as possible.

We have broken the closing process down into three stages: Pre-Closing, Closing, and Post-Closing.

Pre-Closing

The Contract

If you are the buyer and your offer was accepted by the seller, you will enter into a contract. Generally, your real estate agent will prepare the contract. If it is a residential property, agents typically use the TREC One to Four Family Residential Contract. Your agent will also prepare the appropriate addendums.

Be sure to thoroughly review the contract to ensure you understand all the terms. If there is something you do not understand, ask your agent for clarification or have a real estate attorney review the contract for you.

The Inspection

Follow the terms of your contract and calendar your due diligence deadlines. Generally, the contract will outline your option period.

An option period is a specific timeframe agreed upon by both parties during which the buyer can terminate the contract for any reason without risking their earnest money. This timeframe is crucial because it allows you to perform due diligence on the property before fully committing to the contract.

You can order a property inspection report, which will identify concerns or issues with the property.

Lending

Provide a copy of the contract to your lender so they have the material terms of the agreement.

After the inspection is completed, you may discuss negotiation strategies with your real estate agent if concerns arise regarding the property. Ensure your lender receives copies of all amendments to the agreement if the sales price changes or if concessions are negotiated.

Then, contact your lender to ensure an appraisal is ordered and scheduled.

Insurance and Title

Shop around for homeowner’s insurance companies that best suit your needs and select the policy that provides appropriate coverage.

You may also need to provide this information to your lender.

Additionally, you will most likely need title insurance. The title company designated in your contract will provide a title commitment. Be sure to review the title commitment, survey, and abstract within the timeframes specified in the contract.

If you have questions about title issues, contact a real estate attorney to review the commitment. An attorney may identify concerns and recommend submitting title objections.

Financing

To calculate how much property you can afford, a general rule of thumb is to spend no more than 30% of your gross monthly income on housing-related expenses.

Take into consideration:

- Mortgage payments

- Property taxes

- Homeowner’s insurance

- HOA fees

- Cash reserves for repairs and maintenance

You should also consider other financial obligations to understand your debt-to-income ratio.

Financing should generally be addressed before purchasing a home; however, if your financial situation changes during the transaction, reevaluate your budget.

Final Walk-Through

The day before or the day of closing, visit the property.

The final walk-through gives you the opportunity to inspect the property before the official sale. During this time:

- Verify agreed-upon repairs have been completed

- Inspect all appliances

- Check doors and windows

- Ensure the seller's belongings have been removed

- Look for signs of mold or water damage

- Test electrical outlets and switches

- Inspect the exterior and backyard

Closing

The Parties

Know who all the important parties are before closing.

Typically, closing occurs at the title company's office, where a title agent will be present.

Before closing, ask the title agent what documents and items you need to bring. Most title companies will require a valid government-issued photo ID such as a driver's license.

Funding

You will also be required to bring your down payment at closing.

Confirm with the title agent whether funds must be wired or delivered as certified funds, and determine the deadline for submission.

Wire fraud is a serious concern. Always verify wiring instructions directly with the title company or escrow officer before sending funds.

Consider whether you want your real estate agent or attorney present at closing to review the documents with you. If additional parties will attend, allow extra time for discussions.

Important Closing Documents

Before closing, review all documents carefully to verify accuracy.

Double-check:

- Names

- Property address

- Loan amount

- Contact information

- Other important transaction details

Important documents typically include:

Closing Disclosure
Deed of Trust
Promissory Note
Warranty Deed

Post-Closing

Access

After closing, you should receive:

All keys
Garage door openers
Gate access devices
Alarm codes
Access codes

If feasible, change all locks immediately after closing to ensure you are the only person with access to the property.

Utilities

If you have not already done so, connect:

Water service
Gas service
Electricity
Internet/Wi-Fi

We recommend arranging utility transfers prior to closing to avoid interruptions in service.

Homestead Exemptions

If the property will be your primary residence, apply for the Homestead Exemption and any other property tax exemptions for which you qualify.

These forms are typically available through the county appraisal district where the property is located.

Also verify that ownership records have been updated to reflect your information.

Important Documents

Make electronic copies of all closing documents and store the originals in a secure location.

Maintaining organized records will make it easier to access important information in the future.

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Information provided is for educational purposes only and is not legal advice. Consult an attorney regarding your specific circumstances.