Do You Get Keys at Closing? A Homebuyer’s Guide to Closing Day

Do you get keys at closing? The long answer

Buyers already know that closing day is a big deal, but few know what takes place before they get their keys. You’d be surprised by how many people are under the assumption that once they sign the mountain of paperwork, the deal is done, and they can start moving in.

Wrong. Quite a few things have to happen before you can call the house yours. Here are some of the final steps that take place between closing and getting the keys:

1. Financing

On closing day, you are expected to bring the rest of the money you owe to the table, or you won’t walk away with the keys. The money needs to cover the down payment and closing costs, which can be in the form of a cashier’s check or wire transfer.

Your down payment, usually calculated as a percentage of the home’s total purchase price, is the amount that you pay upfront on the house. Your mortgage loan doesn’t cover it. The size of your down payment will depend on your financials and the kind of mortgage loan you have.

It’s important to note that the money you paid after the seller accepted your offer is not the entire down payment. It is called an earnest money deposit. It is made to show the seller that you are serious about following through and closing on the sale. You will lose your earnest money if you back out of the deal.

The earnest money deposit can be as low as $500. However, in most cases, it’s standard to offer 1% to 3% of the final purchase price as earnest money. If you’re interested in buying a high-priced home or if you’re buying in a competitive market, you might want to offer an earnest money number as high as 10% of the purchase price.

»Learn more: Curious how much earnest money you might be expected to put down? Try the earnest money calculator to get a quick estimate based on your potential home purchase price.

Along with the down payment, you are going to have to cover the closing costs. Of course, sellers also have some closing costs, too. A few of the items included in closing costs are:

• Home appraisal
• Escrow fees
• Flood certification
• Property taxes
• Title and attorney fees
• Lender fees

All the financing details above affect when you get the keys because the deal only closes once all required funds are in place and fully funded.

2. Purchase contract

The purchase contract, also known as a real estate contract, is a stack of papers that outlines basic information about the deal, such as who’s buying and selling the house, the description and location of the property, the proposed closing date, and the purchase price. It will also detail the transaction’s finer points, such as the condition of the home and what fixtures or appliances are included in the sale.

While the buyer must understand the purchase contract in full, it’s strongly advised to pay special attention to any addenda or contingencies added in, as these can modify the contract in many ways. As the purchase contract and its contingencies basically set the rules for the deal, you only get the keys once everything in the contract is checked off and the sale officially goes through at closing.

Here are some of the most common contingencies buyers and sellers agree to in a typical home purchase contract:

• A mortgage contingency outlines the type of loan the buyer intends to secure. If the buyer can’t get the loan they applied for, this contingency will let the buyer back out of the contract, penalty-free.
• A home inspection contingency could let the buyer back out of the contract if the home inspection uncovers major problems with the home. If the buyer wants the home, they can ask the seller to lower the price or offer credit instead of repairs.
• An appraisal contingency is required for most mortgage loans to ensure the house is worth at least the money you are borrowing to buy it. If the appraiser thinks the house is worth less than the purchase price, you can renegotiate with the seller or back out of the contract without losing your earnest money.
• A home sale contingency states that the buyer will only move forward with the purchase if they can sell their current home first.

3. Other documents

On the day of closing, be prepared to sign many documents. Some of these documents must be notarized and recorded with the city or county recorder.

Fortunately, the closing attorney or the title agent will send the documents (either online or in person) to the city or county recorder, and then the house is officially yours.

Let’s take a look at the documents that you’ll be signing.

Deed

The deed is a physical document that transfers the property title from the seller to the buyer.  When the new deed is made in the buyer’s name, it is recorded with the city. Remember that since it is recorded with the city, it will be made public that you officially and legally own the property.

There are a few different types of property deeds, but the three most common are called a general warranty deed, a grant deed, and a quitclaim deed. The general warranty and grant deed have some provisions that’ll protect you as the buyer. Upon signing the deed, the seller is indicating that the house is clear of title defects, liens, and other problems with the title.

Title review

Much like a background check for employment, a title review is done for the buyer’s benefit, and mortgage lenders often will require a title review, too. The title company or real estate attorney investigates the title to ensure that there aren’t any liens on the house, missing heirs, or other issues. If the search turns up any problems or defects, that could delay closing.

Mortgage or deed of trust

A mortgage, sometimes called a deed of trust, is an agreement between the buyer and the mortgage lender that says the lender has an interest in the property. Should the buyer default on the loan, this document states that the lender has the right to put the property up for foreclosure.

Common closing-day delays that can affect move-in

So, when do you actually get the keys at closing? In a perfect world, it’s right after you sign the documents, but in real life, a few things still need to line up before that happens. If even one piece gets delayed, your “keys in hand” moment might shift a bit later than expected.

• Bank wire delays: Sometimes the final funds don’t transfer as quickly as planned, especially with large amounts moving between banks. If the wire is sent too late in the day, it may not clear until the next business day, which can delay you getting the keys.
• Late document signatures: Closing can’t be completed if even one required document is still unsigned. It might be something small, but everything has to be fully signed before the keys are handed to you.
• Recording office cut-off times: Your ownership doesn’t fully finalize until the deed is recorded with the county. If your closing misses the recording office’s daily cutoff, the official transfer may not happen until the next business day.
• Weekend or holiday delays: If closing happens right before a weekend or holiday, things can get pushed simply because banks and county offices are closed. That can delay both recording and key release.
• Problems discovered during final walkthrough: If something unexpected comes up during the final walkthrough, like damage or repairs that weren’t finished, it can pause closing. Buyers may wait until the issue is fixed or a credit is negotiated before moving forward.

Even though delays aren’t common, they do happen, and most are minor and fixable. Being prepared just makes it a lot easier to still get your keys without the stress.

So, when do you get the keys at closing?

Closing day can feel hectic, and it’s completely normal to feel nervous. It’s a major milestone, after all. The key is making sure everything is in order so the transaction can be completed without any surprises.

As you review your contract, pay close attention to when the deed and mortgage will be recorded. If everything is finalized before 3 p.m. on a non-Friday closing, you’ll often receive the keys the same day, unless a contingency allows the seller additional time to move out.

Overall, staying on top of the contract details, bringing the necessary funds, and completing your final walkthrough all help ensure a smooth path to getting your keys. To make the process even easier and avoid costly missteps, use HomeLight’s Agent Match tool to connect with a trusted real estate agent who can guide you from contract to closing.

Header Image Source: (Jacob McGowin/ Unsplash)