What Is The Closing Process For New Construction Homes?


The closing process is also known as escrow or settlement. It involves parties from both the buyer and the seller, including you and the seller’s settlement agent(s) at a minimum. It’s a brief yet vital process when you buy a new home.

Here’s what to expect in the final steps of buying a new home, as outlined by Realtor.com and reported by Ryan Homes at Brunswick Crossing:

  1. Do a final walkthrough of your new home. During Week 13 of the homebuilding process by Ryan Homes, you’ll return before settlement for a thorough review and orientation of all systems and features during your Pre-Settlement Demonstration with your project manager.

    This is when your project manager reviews warranty and service instructions and answers all of your questions to ensure you’re comfortable before closing.

  2. Prepare for the closing process. Review your HUD-1 settlement statement to ensure that you understand the terms of your new mortgage loan. The document outlines terms and conditions, the exact monthly mortgage payment, and closing costs.

    Closing costs are additional fees (separate from the “realtor” fee) that cover the following:

    • Loan processing
    • Title company fees
    • Surveyor costs (if needed)
    • Recording of the deed
    • Insurance
    • Any taxes or homeowners association fees, which may need to be prorated if they're already paid

    “The amount of the closing costs...vary with each home sale/purchase and can range widely from 2..to 7 percent of the home's purchase price,” according to Leah Layman, a realtor in Augusta, Georgia. “Typically...closing costs amount to about 3.5 percent of the sale price of a home.”

     Realtor suggests comparing your HUD-1 to the “good faith” estimate that your lender gave you in the beginning of the homebuying process. Ensure that these numbers are similar, and ask your lender to explain any discrepancies.

  3. Gather all of the paperwork.

    Bring the following to settlement:

    • Proof of homeowners insurance
    • A copy of your Ryan Homes contract
    • Any home inspection process reports
    • Any bank documents that were required for mortgage loan approval
    • A government-issued photographic ID 
    • A certified check for settlement funds, as guidelines prohibit the use of personal checks at real estate closings

  4. Understand who will be there and what will happen. If it’s an in-person event, like with Ryan Homes, attorneys, a title company representative, and, occasionally, a bank or lender representative from where you received your loan might be present during the closing process. At the least, a settlement agent or agents will be present.

    This is to ensure that everyone is aware of the legalities of homebuying. Other new construction companies take advantage of technology, as some settlement procedures are computerized or automated. Other companies offer overnight delivery of signed documents.

    So, what happens?

    In the presence of these key players to your home-buying process, you sign your name on a pile of legal documents to take full ownership of the residential property. You also pay closing costs, as listed above.

    At the end of the meeting, you receive the keys to your brand-new construction home, as well as a few important documents. This includes closing disclosure, mortgage note, mortgage or deed of trust, and certificate of occupancy, according to Bankrate

  5. Manage your expectations. When you buy a home, the process naturally comes with a few curveballs. Even new construction homes aren’t impervious to someone getting stuck in traffic or falling ill, a missing document, a misspelled name on an important form, and other unfortunate circumstances.

    Prepare yourself for these instances by remaining calm and following the process on schedule as outlined by your home builder, sales consultant, and your loan officer and processor.