Checklist · Real Estate

Closing a Residential Real Estate Purchase: A Practical Checklist

42 U.S.C. § 4852

Type
Checklist
Jurisdiction
National
Date
2024-02-03
Topic
Real Estate

A residential closing is a deadline machine: a dozen contingencies, a lender, a title underwriter, two brokers, a settlement agent, and a wire that must land in the right account on the right day. This checklist walks buyer's and seller's counsel through the transaction phase by phase — docketing every contract deadline, ordering and actually reading the title commitment, clearing Schedule B exceptions and old liens, satisfying the financing and appraisal contingencies, negotiating inspection repairs and credits, testing the Closing Disclosure against the Loan Estimate under the TRID three-business-day rule, preparing the deed and transfer-tax forms, running the final walkthrough, funding and disbursing, and recording. Each phase is followed by the traps that actually generate malpractice claims and blown closings. A running worked example — the Nakamura family's purchase of 412 Wexford Lane — carries a surprise mechanic's lien and a failed inspection item through every stage. Real estate law is intensely state-specific; the federal disclosure overlay is uniform, but recording acts, transfer taxes, seller-disclosure duties, lien statutes, and closing customs are not, so confirm your own state's rules before you rely on anything here.

Closing a Residential Real Estate Purchase: A Practical Checklist

Real Estate > Residential Transactions | Published 3 February 2024 - Updated 12 June 2025 | UpLaw - uplaw.us

A house closing is not one transaction. It is five transactions — a sale, a loan, a title insurance policy, a tax event, and a recording — that must all land on the same afternoon. The lawyer's job is to make sure none of them is the one that doesn't.

Keywords: residential closing, title commitment, Schedule B exceptions, title insurance, RESPA, TRID, Closing Disclosure, recording acts, payoff letter, mechanic's lien, final walkthrough, transfer tax, deed, escrow, wire fraud

How to use this checklist

This is a working document for the lawyer who has just been retained on a residential purchase and needs to know what to do on Monday morning. It is organized into ten phases, roughly chronological, each with check items and a "Why it matters, and the traps" note. A consolidated one-glance checklist appears near the end.

A warning that cannot be repeated too often: real estate law is state law. Whether an attorney must attend closing at all, or whether a title or escrow company runs the table, varies by state and even by region within a state. Recording acts vary. Transfer taxes vary wildly — Texas imposes no state real estate transfer tax, while New York layers a state transfer tax and, for residences at $1 million and above, an additional "mansion tax" under N.Y. Tax Law § 1402-a. Seller disclosure duties vary, from robust statutory disclosure regimes to something much closer to caveat emptor. Mechanic's lien priority rules vary. The federal overlay — RESPA and the TILA-RESPA Integrated Disclosure rules — is uniform. Almost nothing else is. Confirm your jurisdiction's rule before you rely on any statement here. Where this checklist names a state, it is offering a representative example, not a nationwide rule.

For the doctrinal background behind every step below, see the companion guide, Buying and Selling a Home: A Comprehensive Legal Guide from Contract to Closing, and the umbrella resource map, The Real Estate Transactions Toolkit.

Our worked example. Throughout, we follow the Nakamura family — Ken and Priya Nakamura and their two children — buying 412 Wexford Lane, a 1968 colonial, from a seller named Ardith Vance for $685,000, with a $548,000 conventional loan. You are the Nakamuras' counsel. Two problems will surface: a title exception you did not expect, and a water heater that fails inspection. Both are ordinary. Both are how closings die.

Phase 1 — Intake: read the contract and calendar every deadline

  • [ ] Obtain the fully executed purchase agreement, every addendum, every counteroffer, and proof of the earnest money deposit.
  • [ ] Confirm the contract satisfies the statute of frauds: a writing, the parties, the price, a description of the property, and the signature of the party to be charged. See Restatement (Second) of Contracts § 125 (contracts transferring an interest in land).
  • [ ] Verify the legal description (metes and bounds, lot-and-block, or reference to a recorded plat) — not just the street address. Pull it from the prior recorded deed, never from the tax assessor's card.
  • [ ] Identify the exact named buyers and how title will vest: individually; tenants in common; joint tenants with right of survivorship; tenants by the entirety (available to married couples in some states, not all); a revocable trust; an LLC.
  • [ ] Confirm all sellers of record are signing — including a non-titled spouse where state homestead, dower, or marital-interest law requires it.
  • [ ] Docket, on a calendar with reminders, every deadline: inspection period expiration, financing contingency date, appraisal contingency date, title objection deadline, seller's cure period, HOA/condo document review period, walkthrough, and the closing date.
  • [ ] Determine whether the contract says "time is of the essence." If it does, know exactly what it applies to.
  • [ ] Note any attorney review or attorney approval period your state or local form uses (New Jersey and Illinois practice are the familiar examples) and confirm whether it is running right now.
  • [ ] Confirm risk of loss allocation before closing. Many states have adopted a version of the Uniform Vendor and Purchaser Risk Act (see, e.g., N.Y. Gen. Oblig. Law § 5-1311; Cal. Civ. Code § 1662); others still apply equitable conversion, which generally puts the risk on the buyer once the contract is signed. Check yours.
  • [ ] For housing built before 1978, confirm the lead-based paint disclosure and the buyer's opportunity to conduct a risk assessment or inspection under 42 U.S.C. § 4852d and 40 C.F.R. Part 745 (a 10-day period unless the parties agree otherwise).
  • [ ] Run a conflicts check and paper the engagement: who is the client, and is anyone assuming you also represent them?

Why it matters, and the traps. Nearly every closing that goes wrong went wrong on day one, in a diary entry that was never made. Contingency deadlines are usually self-executing: if the buyer does not give written notice by 5:00 p.m. on the stated day, in the stated manner, the contingency is waived and the earnest money is at risk. Courts enforce these dates, and where "time is of the essence" appears, they tend to enforce them strictly.

Two intake traps recur. First, the wrong buyer name. If the Nakamuras intend to hold as tenants by the entirety for creditor-protection reasons, that has to be in the deed — and it has to match the loan documents. Fixing it after recording means a corrective deed and, sometimes, a second transfer tax. How title vests also interacts directly with estate planning; see Wills, Trusts, and Probate: A Comprehensive Estate Planning Guide and The Estate Planning and Wealth Transfer Toolkit. Second, the missing signature: a seller who inherited the property, or whose ex-spouse's interest was never actually released by the divorce decree, cannot convey clean title alone. When the chain runs through a dissolution, see Divorce: A Comprehensive Guide to Dissolution, Property Division, Support, and Custody and The Family Law Toolkit; when it runs through an estate, see Administering an Estate: A Probate Checklist.

Phase 2 — Title: order the commitment, read Schedule B, clear the exceptions

  • [ ] Order the title commitment (the ALTA Commitment for Title Insurance form is the industry standard) and the underlying title search immediately — do not wait for the inspection to clear.
  • [ ] Read Schedule A: the effective date, the proposed insured, the policy amount, the estate being insured (fee simple?), the record title holder, and the legal description.
  • [ ] Read Schedule B-I (Requirements): what must actually be done before the policy issues — payoffs, releases, corporate resolutions, death certificates, probate documents, a survey.
  • [ ] Read Schedule B-II (Exceptions): what the policy will not cover. This is the most important page in the file.
  • [ ] Sort every exception into one of three buckets: (a) standard/pre-printed exceptions that can often be removed with an owner's affidavit and a current survey; (b) permitted exceptions the buyer must live with (utility easements, recorded plat restrictions); (c) unacceptable exceptions that must be cleared before closing (mortgages, judgment liens, tax liens, mechanic's liens, unreleased options, life estates).
  • [ ] Pull and actually read the recorded documents behind the exceptions — the easement, the declaration, the restrictive covenant. Do not rely on the title company's one-line summary.
  • [ ] For a condo or HOA, obtain the declaration, bylaws, budget, reserve study, minutes, and estoppel/resale certificate, and confirm there is no pending special assessment.
  • [ ] Send a timely, written title objection letter within the contract's title review period, itemizing each unacceptable exception.
  • [ ] Confirm what the seller must do to cure, and whether the seller has a right to terminate rather than cure (many residential contracts give the seller that escape hatch if cure costs exceed a stated dollar cap).
  • [ ] Decide on endorsements. The ALTA endorsement series covers survey/restrictions-encroachments-minerals, environmental protection lien, access, contiguity, zoning, and more; availability and pricing are state- and underwriter-specific.
  • [ ] Buy an owner's policy. The lender's policy protects the lender only, and its coverage declines with the loan balance.

Why it matters, and the traps. The lender's title policy is not the buyer's title policy — a distinction an alarming number of buyers never grasp. If the Nakamuras skip the owner's policy to save a one-time premium, they are uninsured against the very defect that later destroys their equity. Underlying all of this are the state marketable title standards and, in many states, a marketable record title act that extinguishes stale interests after a statutory root-of-title period. Those acts are not uniform; do not assume yours works like the neighboring state's.

Worked example. The Wexford Lane commitment comes back with a Schedule B-II exception you did not expect: "Mechanic's lien in favor of Cortland Kitchen & Bath, LLC, recorded 14 March 2023, in the amount of $18,400." Ms. Vance had a kitchen remodeled, disputed the final invoice, and stopped paying. Two things follow. First, this is bucket (c) — unacceptable — and your objection letter must say so in writing before the title review period lapses. Second, mechanic's lien statutes in many states allow the lien to relate back to the date work commenced or materials were first furnished, which can prime interests recorded later; the rules differ substantially state to state, so do not assume the lien is junior just because it was recorded last. The practical cure is a payoff-and-release at closing, or a title-company-approved bond or escrow holdback under an indemnity, with the underwriter agreeing in writing to insure over the exception. "The seller says she'll take care of it" is not a cure.

The other classic trap is the stale search. The commitment has an effective date; liens recorded after that date are not on it. Insist on a bring-down or gap search immediately before recording, and get gap coverage where your state's recording system creates a gap between disbursement and recording.

Phase 3 — Survey, liens, judgments, and payoff letters

  • [ ] Order a survey (or, where local custom permits, an existing survey plus a seller's no-change affidavit) and physically compare it to the legal description and the recorded plat.
  • [ ] Look for encroachments (the neighbor's fence, the shed over the setback), unrecorded easements evidenced by visible use (a worn driveway, a path), and violations of recorded setbacks or building lines.
  • [ ] Run name searches on every seller for judgment liens, state and federal tax liens, child support liens, and bankruptcy filings — including former names and misspellings.
  • [ ] Confirm the status of real property taxes and any special assessment districts; obtain the current bill and confirm the proration method (in arrears or in advance — this varies by county, not just by state).
  • [ ] Obtain a written payoff letter for every mortgage and home equity line, with the per diem and the good-through date. Under Regulation Z, 12 C.F.R. § 1026.36(c)(3), a servicer of a closed-end consumer mortgage must provide an accurate payoff statement within a reasonable time after a written request — generally no more than seven business days.
  • [ ] For a HELOC, obtain written instructions to freeze and close the line. A zero balance is not enough — an open line can be redrawn after closing.
  • [ ] Confirm whether the seller is a foreign person for FIRPTA purposes (26 U.S.C. § 1445). If so, withholding of a percentage of the amount realized (15% is the general rate, with statutory and regulatory exceptions and reduced-rate certificates) may be required. If the seller is a U.S. person, take a certification of non-foreign status in the form the Treasury regulations contemplate.
  • [ ] Identify the 1099-S reporting person (usually the settlement agent) under 26 U.S.C. § 6045(e).
  • [ ] Confirm flood zone status. If the property is in a Special Flood Hazard Area and the loan is made by a federally regulated lender, flood insurance is mandatory under 42 U.S.C. § 4012a.

Why it matters, and the traps. The lien search is where the seller's other life shows up in your transaction: the tax lien from a failed business, the judgment from a car accident, the ex-spouse's support arrearage. Any of these can attach to the property and must be paid or released at closing.

The two traps here are the per diem and the open HELOC. A payoff letter good through the 14th is worthless at a closing that slips to the 19th; get an updated figure, and always pad the wire slightly with the overage refunded to the seller. And the un-frozen HELOC is a genuine disaster: the seller draws $40,000 the morning of closing, the payoff is short, the lien does not release, and the buyer's new mortgage is not in first position. The Restatement (Third) of Property: Mortgages collects the background rules on lien priority and on subrogation when a payoff goes wrong — but subrogation is a remedy, not a plan.

Phase 4 — Financing and appraisal contingencies

  • [ ] Read the financing contingency with care: what loan type, what maximum rate, what maximum points, what deadline, and — critically — is the buyer's obligation to apply and diligently pursue the loan an express condition?
  • [ ] Confirm the buyer has submitted an application as Regulation Z defines that term (12 C.F.R. § 1026.2(a)(3)), which starts the lender's clock to deliver the Loan Estimate.
  • [ ] Obtain and review the Loan Estimate (12 C.F.R. § 1026.19(e); content requirements at § 1026.37). Keep it — you will compare it line by line to the Closing Disclosure.
  • [ ] Track conditions to the commitment: employment verification, gift letters (the donor must be documented and the funds sourced), sale of the buyer's current home, HOA questionnaire, condo project approval.
  • [ ] Docket the appraisal contingency separately from the financing contingency. They are not the same thing, and they rarely expire on the same day.
  • [ ] If the appraisal comes in low, know the options: the seller reduces the price, the buyer brings additional cash to bridge the gap, the parties split it, the buyer terminates (if the contingency permits), or the buyer requests a reconsideration of value with better comparable sales.
  • [ ] Do not let the financing contingency lapse while waiting on an appraisal or a lender's "clear to close." If you need more time, get a written extension signed by both parties.
  • [ ] Advise the buyer, in writing, to make no new credit inquiries, no new debt, and no job changes before closing.

Why it matters, and the traps. The financing contingency is the buyer's escape hatch and the seller's biggest exposure. The trap is passivity: a buyer who does not apply, or who applies for a loan the contract never contemplated, may be found to have failed to pursue financing in good faith and to have forfeited the deposit. On the seller's side, the deposit is usually the entire remedy — most residential contracts liquidate damages at the earnest money — which is why the enforceability of that clause matters so much. For how courts assess forfeiture, liquidated damages, and expectation recovery when a deal dies, see Contract Damages: How Courts Make the Injured Party Whole and The Commercial Contracts Toolkit: Drafting, Reviewing, and Enforcing Business Agreements.

Phase 5 — Inspection, repairs, and credits

  • [ ] Calendar the inspection period and confirm inspections are actually scheduled: a general home inspection, plus radon, termite/wood-destroying organism, sewer scope, well and septic, mold, chimney, and structural or roof specialists as the property warrants.
  • [ ] Review the seller's disclosure statement (most states require one; the content and the consequences of an omission vary) against the inspection report. Discrepancies are leverage — and, sometimes, evidence.
  • [ ] Deliver the buyer's repair request or objection notice in writing, within the period, in the form and by the delivery method the contract requires.
  • [ ] Choose the remedy deliberately: seller repairs before closing (with a right to re-inspect), a credit toward the buyer's closing costs, a price reduction, or an escrow holdback for work that cannot be completed in time.
  • [ ] Confirm the lender will permit the chosen structure. Seller credits are capped by loan program and generally cannot exceed actual closing costs; a "repair credit" that becomes cash back to the buyer at the table will be rejected — and, if disguised, is loan fraud.
  • [ ] If the seller repairs, get licensed-contractor invoices, permits, and lien waivers — new work means new mechanic's lien exposure.
  • [ ] Confirm the contract's merger by deed clause and whether repair obligations survive closing. If they must survive, say so expressly in the amendment.

Why it matters, and the traps. Worked example. The Wexford Lane inspection finds a 19-year-old water heater at the end of its life, an ungrounded outlet cluster in the basement, and evidence of past moisture at the foundation. The Nakamuras want $9,500. Ms. Vance offers $4,000. You settle at a $5,500 seller credit toward the buyer's closing costs — and then you check with the lender, because the Nakamuras' total closing costs and prepaids are only $6,100. The credit fits, barely. Had the credit exceeded actual costs, the excess would simply have vanished, and the Nakamuras would have gotten nothing for it. That is the single most common repair-credit mistake in residential practice: a credit larger than the costs it can be applied against. The alternative — a $5,500 price reduction — puts the money in the buyer's pocket by lowering the amount financed, but it also re-tests the appraisal and the loan-to-value, so model both before you pick.

The doctrinal trap is merger by deed. In most states, delivery and acceptance of the deed merges the contract's obligations into the deed, extinguishing them, subject to exceptions for collateral covenants and for fraud. The contours of the doctrine and its exceptions differ by state. If the seller's promise to fix the outlets is to survive, it must be drafted as an express survival obligation — and, ideally, backed by an escrow holdback rather than a promise.

On the disclosure side, sellers who conceal known, material, non-obvious defects face real liability, but the baseline rule is state law. Florida's Johnson v. Davis, 480 So. 2d 625 (Fla. 1985), imposed on the seller of a residence a duty to disclose known facts materially affecting value that are not readily observable. New York's Stambovsky v. Ackley, 169 A.D.2d 254 (N.Y. App. Div. 1991) — the famous haunted-house case — permitted rescission where the seller had created and publicized a condition the buyer could not have discovered through ordinary diligence. Other states remain far closer to caveat emptor, softened by a statutory disclosure form. Check your state's rule; do not assume Johnson states a national duty.

Phase 6 — The Closing Disclosure and TRID timing rules

  • [ ] Confirm the borrower receives the Closing Disclosure at least three business days before consummation. 12 C.F.R. § 1026.19(f)(1)(ii). For this rule, "business day" means all calendar days except Sundays and the federal legal holidays specified in the regulation (the "precise" definition, 12 C.F.R. § 1026.2(a)(6)) — a Saturday counts.
  • [ ] Understand that consummation — the moment the borrower becomes contractually obligated on the loan under state law — is the trigger. Not funding. Not recording.
  • [ ] Compare the CD (content required by 12 C.F.R. § 1026.38) line by line against the Loan Estimate.
  • [ ] Apply the tolerance rules of 12 C.F.R. § 1026.19(e)(3): zero tolerance for the lender's own charges and for charges for services the borrower could not shop for; a 10% cumulative tolerance for recording fees and for services on the lender's written provider list where the borrower selected a listed provider; no tolerance limit for prepaids, escrow deposits, and services the borrower shopped for outside the list.
  • [ ] If a tolerance is exceeded, demand a cure. The creditor must refund the excess and deliver a corrected disclosure no later than 60 days after consummation. 12 C.F.R. § 1026.19(f)(2)(v).
  • [ ] Know the three redisclosure triggers that restart the three-business-day waiting period under 12 C.F.R. § 1026.19(f)(2)(ii): the disclosed APR becomes inaccurate, the loan product changes, or a prepayment penalty is added. Everything else — including a last-minute seller credit or a fee change — permits a corrected CD at or before consummation without a new waiting period.
  • [ ] Verify the escrow account disclosure and confirm the cushion complies with RESPA's limits (12 U.S.C. § 2609; Regulation X, 12 C.F.R. Part 1024) — generally no more than one-sixth of the estimated annual disbursements.
  • [ ] Scrutinize the fee list for RESPA Section 8 problems: kickbacks, unearned fees, and fee splits are prohibited by 12 U.S.C. § 2607; affiliated business arrangements must be disclosed and must not involve a referral fee.
  • [ ] Confirm who is paying what: origination, discount points, appraisal, credit report, title search, lender's and owner's title policies, survey, recording, transfer taxes, HOA transfer fees, and prorations.

Why it matters, and the traps. The TILA-RESPA Integrated Disclosure regime is the one piece of the residential closing that is federal, uniform, and unforgiving. The three-business-day rule is not a courtesy; a violation exposes the creditor and can force the closing to be rescheduled at the worst possible moment.

The trap that surprises even experienced counsel is the rescission mirage. TILA's three-business-day right of rescission (15 U.S.C. § 1635) applies to refinances and home equity loans secured by a principal dwelling. It does not apply to a residential mortgage transaction used to acquire the dwelling. 12 C.F.R. § 1026.23(f)(1). The Nakamuras have no cooling-off right after signing. Once they sign, they own the house and the loan.

The second trap is the quiet tolerance violation. Lenders do not volunteer that they blew a zero-tolerance fee. That is why you keep the Loan Estimate and do the comparison yourself. On the Wexford Lane file, the CD shows a lender's underwriting fee $350 higher than the LE, with no changed circumstance documented anywhere. That is a zero-tolerance item. You ask; the lender cures; the Nakamuras get $350 they would otherwise have paid without noticing.

Phase 7 — Deed, transfer taxes, and closing documents

  • [ ] Draft or review the deed. Confirm the form the contract requires: a general warranty deed (the traditional covenants — seisin, right to convey, against encumbrances, quiet enjoyment, warranty, and further assurances), a special or limited warranty deed (warranting only against defects arising during the grantor's own ownership), or a quitclaim (conveying whatever the grantor has, if anything, with no warranties). Deed nomenclature and the covenants implied by statute vary by state.
  • [ ] Confirm the deed's grantee names, vesting language, marital status recitals, legal description, and consideration recital are exactly right.
  • [ ] Confirm execution formalities: signatures, notarial acknowledgment (see the Revised Uniform Law on Notarial Acts, adopted in many states), and any state-specific requirement — witnesses in some states, a "prepared by" or return-address block, a mandatory transfer-tax affidavit.
  • [ ] Prepare or obtain transfer tax forms and confirm the rate, the payer (a matter of contract and local custom, not law), and any available exemption.
  • [ ] Assemble the seller's package: payoff letters, lien releases, a seller's affidavit of title / owner's affidavit (no unrecorded work, no parties in possession, no undisclosed liens), FIRPTA certification, 1099-S certification, mechanic's lien waivers, keys, HOA transfer forms, and any bill of sale for personalty.
  • [ ] Assemble the buyer's package: note, mortgage or deed of trust, initial escrow statement, right-to-receive-appraisal acknowledgment, occupancy affidavit, homestead declaration (where applicable), and the Closing Disclosure.
  • [ ] Confirm the homeowner's insurance binder is in place, effective on the closing date, with the lender named as mortgagee, and that the first year's premium is paid or escrowed. Add the flood policy if required.
  • [ ] Confirm utility transfers and final meter readings.
  • [ ] Where documents will be signed or notarized electronically, confirm your state's law permits it for recordable instruments (E-SIGN, 15 U.S.C. § 7001, and the Uniform Electronic Transactions Act do not by themselves make every deed e-signable in every county recorder's office).

Why it matters, and the traps. The deed is the only document in the file that will still be operative in fifty years. A misspelled name, an omitted "as tenants by the entirety," or a legal description copied from the tax assessor rather than the prior recorded deed will haunt the next sale — and curing it requires the cooperation of a seller who has moved on and has no reason to help.

Watch the transfer tax. It ranges from nothing at all (Texas imposes no state transfer tax) to a meaningful percentage of the price in states like Delaware and in New York City on top of the state tax. Who pays is a matter of contract and local custom, and a $6,000 surprise on the settlement statement at 4:00 p.m. is a closing that does not happen.

Note also what the deed does not do: it does not carry forward the contract's covenants (see merger, above), and its warranties, if any, run to the grantee, not to the world.

Phase 8 — Final walkthrough and closing-day mechanics

  • [ ] Schedule the final walkthrough as close to closing as possible — ideally the morning of.
  • [ ] Confirm: agreed repairs are done; systems operate (run the HVAC, the water heater, every faucet); the appliances and fixtures that were to convey are still there; there is no new damage from the move-out; the property is broom-clean and vacant; all personal property is removed.
  • [ ] Confirm no new construction or delivery of materials since the title search — new work means new mechanic's lien exposure, and in relation-back states that exposure can predate your recording.
  • [ ] If something is wrong, know the options before you are standing in the driveway: delay the closing, an escrow holdback, a credit at closing, or (rarely, and only if the contract supports it) terminate.
  • [ ] Confirm possession: at closing, or under a post-closing possession / use-and-occupancy agreement? If the seller stays even one night, paper it — a rent-back is a short-term tenancy, and in some jurisdictions it can implicate landlord-tenant protections that are surprisingly hard to unwind. See Residential Landlord-Tenant Compliance and Eviction: A Practical Checklist.
  • [ ] Confirm all parties' identification and signing authority; confirm any power of attorney is in the lender-approved form and, where required, recorded before or with the deed.
  • [ ] Verify the final settlement statement and CD figures one last time against the payoffs, prorations, and credits.

Why it matters, and the traps. The walkthrough is not a re-inspection; it is a confirmation that the property is in the condition the contract requires. The trap is the buyer who discovers a problem and closes anyway "because the movers are coming." Once the deed is delivered and accepted, leverage is gone and, thanks to merger, so may be the claim.

Phase 9 — Funding, disbursement, and recording

  • [ ] Confirm the buyer's cash to close is sent by wire, not check, and only after independent verbal verification of the wire instructions (see Phase 10).
  • [ ] Confirm the lender's funds have arrived and that the settlement agent is authorized to disburse. Many states have "good funds" statutes requiring collected funds before disbursement (California Insurance Code § 12413.1 is the best-known example; the rules and the definition of "good funds" differ from state to state).
  • [ ] Disburse in the correct order: payoffs first (with the per diem verified as of the actual payoff date), then liens, taxes, commissions, fees, and finally the seller's net proceeds.
  • [ ] Record the deed and mortgage promptly, in the correct order (deed first, then the mortgage from the new owner), in the county or parish where the land lies.
  • [ ] Know your state's recording act and why speed matters. The three classical models are:
    • Race: the first to record prevails, even with notice of the earlier interest. North Carolina's Connor Act, N.C. Gen. Stat. § 47-18, is the standard example; Louisiana's public records doctrine is often described the same way.
    • Notice: a subsequent bona fide purchaser without notice prevails, whether or not she records first. Florida (Fla. Stat. § 695.01) and Texas (Tex. Prop. Code § 13.001) are commonly characterized this way.
    • Race-notice: a subsequent bona fide purchaser without notice prevails only if she also records first. California (Cal. Civ. Code § 1214) and New York (N.Y. Real Prop. Law § 291) are commonly characterized this way. These labels are teaching tools. Real statutes have exceptions, courts have glossed them, and a few states resist tidy classification. Read your own statute and your own cases rather than relying on the label.
  • [ ] Confirm e-recording availability (many states have adopted a version of the Uniform Real Property Electronic Recording Act, but adoption is county-by-county in practice) and obtain the recording receipt with the book/page or instrument number.
  • [ ] Obtain recorded releases and satisfactions of the paid-off mortgages and liens — and diary them. Servicers are slow, and an unreleased but satisfied mortgage is the buyer's problem at the next sale.

Why it matters, and the traps. Recording is what converts a private conveyance into constructive notice to the world. The gap between closing and recording is the most dangerous window in the transaction: an intervening judgment lien, a second deed from a fraudulent seller, or a bankruptcy filing can all land in it. Record the same day where you can. The Restatement (Third) of Property: Mortgages supplies the background rules on lien priority, subrogation, and the effect of payoff and release, and it is the right place to start when the recording order goes wrong.

Phase 10 — Post-closing: title policy, wire-fraud safeguards, and file closeout

  • [ ] Confirm the owner's title policy actually issues (not just the commitment) and that it matches the negotiated exceptions and endorsements.
  • [ ] Confirm the recorded deed is returned and that the buyer's name appears on the tax rolls for the next cycle.
  • [ ] File any homestead exemption or property-tax cap application — these are often deadline-driven and worth thousands of dollars a year.
  • [ ] Confirm the satisfaction or release of every paid lien is recorded.
  • [ ] Deliver a closing binder to the client: deed, title policy, CD, note, mortgage, survey, disclosures, insurance, and warranties.
  • [ ] Remind the client that private mortgage insurance may be cancelled on request at 80% loan-to-value and terminates automatically at 78% under the Homeowners Protection Act, 12 U.S.C. § 4901 et seq.
  • [ ] Confirm the capital gain exclusion analysis under 26 U.S.C. § 121 (up to $250,000, or $500,000 for a qualifying married couple filing jointly, subject to the ownership and use tests) is on the seller's tax adviser's radar.

Wire fraud — treat this as a standing control, not a step.

  • [ ] Never accept wire instructions delivered or changed by email. Business email compromise in real estate closings is a mature criminal industry.
  • [ ] Verify every wire instruction by calling a number you already had — from the engagement letter, not from the email signature block.
  • [ ] Warn clients in writing, at engagement and again before closing, that instructions will never change by email.
  • [ ] Encrypt or use a secure portal for closing documents. See ABA Formal Opinion 477R (2017) on securing the communication of protected client information and ABA Formal Opinion 483 (2018) on a lawyer's obligations after an electronic data breach; Model Rule of Professional Conduct 1.6(c) requires reasonable efforts to prevent unauthorized disclosure of client information.
  • [ ] If a wire goes astray, act within hours: contact the sending bank to initiate a recall, file with the FBI's Internet Crime Complaint Center to trigger the financial fraud kill chain, and notify counsel and insurers. For the broader response framework, see Responding to a Data Breach: A Notification and Incident Response Checklist and Data Breach Notification Law: A Comprehensive Guide.

Why it matters, and the traps. Wire fraud is now the most likely way a residential closing produces a six-figure loss and a malpractice claim. The money is usually gone within hours. Prevention is the only real remedy, and the prevention is boringly simple: a phone call to a number you already had.

Common Mistakes to Avoid

  1. Not docketing the contingency dates on day one. Every other failure in this document is downstream of this one.
  2. Skimming Schedule B. The exceptions page is the file. Read the recorded documents behind it.
  3. Declining the owner's title policy. The lender's policy protects the lender.
  4. Oral title objections. Object in writing, within the period, itemized.
  5. A repair credit larger than the buyer's closing costs. The excess evaporates. Consider a price reduction instead — after confirming it does not disturb the appraisal or the loan-to-value.
  6. Trusting a stale payoff letter. Get the per diem and the good-through date, and update the figure if the closing slips.
  7. Leaving a HELOC open. Freeze and close the line in writing.
  8. Assuming a right to rescind a purchase-money mortgage. There isn't one. 12 C.F.R. § 1026.23(f)(1).
  9. Not comparing the Closing Disclosure to the Loan Estimate. Tolerance violations are common and curable — if you catch them.
  10. Closing on a walkthrough failure "because the movers are coming." Leverage ends at delivery of the deed.
  11. Letting repair promises die by merger. Draft an express survival clause or hold the money back in escrow.
  12. Delaying recording. The gap is where the bad things live.
  13. Accepting wire instructions from an email. Call. Every time. No exceptions.
  14. Applying another state's rules. Recording acts, disclosure duties, transfer taxes, lien priority, witness requirements, and closing customs are all local.

The consolidated closing checklist

Contract & calendar

  • [ ] Executed contract, addenda, earnest money receipt
  • [ ] Legal description verified; buyer vesting confirmed
  • [ ] All deadlines docketed with reminders; "time is of the essence" noted
  • [ ] Attorney review period (if any) tracked
  • [ ] Conflicts check run; engagement papered

Title & survey

  • [ ] Commitment ordered; Schedules A, B-I, and B-II read
  • [ ] Exceptions triaged; underlying recorded documents pulled
  • [ ] Written title objection sent within the period
  • [ ] Survey reviewed for encroachments and easements
  • [ ] Condo/HOA documents and estoppel obtained
  • [ ] Endorsements selected; owner's policy ordered

Liens & payoffs

  • [ ] Judgment, tax, and bankruptcy searches run on all sellers
  • [ ] Payoff letters with per diem and good-through date
  • [ ] HELOCs frozen and closed in writing
  • [ ] Mechanic's liens released, bonded, or escrowed with underwriter sign-off
  • [ ] FIRPTA and 1099-S handled

Loan

  • [ ] Loan Estimate received and retained
  • [ ] Financing and appraisal contingencies tracked separately
  • [ ] Commitment conditions cleared; "clear to close" confirmed
  • [ ] Buyer warned: no new credit, no new debt, no job changes

Inspection

  • [ ] Inspections completed within the period
  • [ ] Written objection/repair request delivered
  • [ ] Remedy structured (repair / credit / price reduction / holdback) and lender-approved
  • [ ] Survival language drafted where needed

Disclosure

  • [ ] CD received at least 3 business days before consummation (12 C.F.R. § 1026.19(f)(1)(ii))
  • [ ] CD compared line by line to the LE; tolerances tested
  • [ ] Escrow, prorations, credits, and transfer taxes verified

Documents

  • [ ] Deed drafted in the required form and correctly executed and acknowledged
  • [ ] Transfer tax forms prepared
  • [ ] Seller's affidavit of title, lien waivers, FIRPTA certification
  • [ ] Homeowner's (and flood) insurance bound, lender named as mortgagee

Closing day

  • [ ] Final walkthrough completed
  • [ ] Wire instructions verified by phone to a known number
  • [ ] Good funds confirmed; disbursement in the correct order
  • [ ] Deed and mortgage recorded — same day if possible

Post-closing

  • [ ] Owner's policy issued and reviewed
  • [ ] Recorded deed and lien releases obtained
  • [ ] Homestead/tax exemption filed
  • [ ] Closing binder delivered; file closed

Primary Authority

Federal statutes and regulations

State law (representative examples only — confirm your own jurisdiction)

  • State recording acts. The race, notice, and race-notice models, and the marketable title standards that sit behind them, are creatures of state law. Representative statutes: N.C. Gen. Stat. § 47-18 (race); Fla. Stat. § 695.01 and Tex. Prop. Code § 13.001 (commonly described as notice); Cal. Civ. Code § 1214 and N.Y. Real Prop. Law § 291 (commonly described as race-notice).
  • Marketable record title acts (e.g., Fla. Stat. ch. 712) and state bar title standards
  • Uniform Vendor and Purchaser Risk Act (e.g., N.Y. Gen. Oblig. Law § 5-1311; Cal. Civ. Code § 1662); equitable conversion in states that have not adopted it
  • Uniform Real Property Electronic Recording Act (URPERA); Uniform Electronic Transactions Act (UETA); Revised Uniform Law on Notarial Acts (RULONA)
  • Good funds statutes (e.g., Cal. Ins. Code § 12413.1)
  • Transfer taxes (e.g., N.Y. Tax Law §§ 1402 and 1402-a, the "mansion tax"); several states, including Texas, impose no state transfer tax
  • State mechanic's lien statutes (relation-back, notice, and priority rules vary substantially)
  • State seller-disclosure statutes and the common-law duty to disclose

Cases

  • Johnson v. Davis, 480 So. 2d 625 (Fla. 1985) (seller's duty to disclose known material defects not readily observable to the buyer)
  • Stambovsky v. Ackley, 169 A.D.2d 254 (N.Y. App. Div. 1991) (rescission where the seller had created and publicized a condition the buyer could not have discovered)

Restatements, uniform acts, and industry forms

  • Restatement (Third) of Property: Mortgages (lien priority, payoff, release, subrogation, and the mortgage-substitute doctrines)
  • Restatement (Second) of Contracts § 125 (statute of frauds — contracts transferring an interest in land)
  • ALTA title commitment and policy forms: the ALTA Commitment for Title Insurance, the ALTA Owner's Policy and Loan Policy, and the ALTA endorsement series (private industry forms; availability and modification vary by state and underwriter)
  • ABA Formal Opinion 477R (2017) and ABA Formal Opinion 483 (2018); ABA Model Rule of Professional Conduct 1.6(c)

Secondary Sources

  • Powell on Real Property
  • Patton and Palomar on Land Titles
  • Nelson & Whitman, Real Estate Finance Law
  • Corbin on Contracts (conditions, waiver, and time-of-the-essence)
  • Your state's continuing legal education materials on residential closing practice — in this field, the local treatise beats the national one

Related UpLaw Resources

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This checklist is general legal information from UpLaw (uplaw.us), not legal advice, and does not create an attorney-client relationship. Real estate law is intensely state-specific and changes over time; verify your jurisdiction's current recording act, disclosure statutes, transfer taxes, lien rules, and closing requirements, and consult qualified counsel before acting.