Closing on a New Construction Home (2023)

Construction is well underway and your close date is set - now what?

What Does it Mean to Close on a House?

Closing on your new home is the "settlement" process of the real estate transaction after you've signed a contract for a new home.

Settlement is when the legal transfer of property occurs and funds are transferred from the buyer to the seller.

Where is Closing?

Closings typically occur at a title company and are attended by all buyers and the Escrow Officer, unless you are doing a mail-out closing.

(Video) What Should I Know Before I Close on My New Construction Home - Closing Process with Home Builders

It is important that all buyer parties on the contract are present to sign - this includes non-purchasing spouses.If you have questions about who needs to sign, please contact your lender and the title company for clarification.

Since 2013, Omega has successfully closed over 1400 homes with CentraLand Title Company located at 2005 Birdcreek Drive in Temple, TX because of their local expertise, service standards, market conduct and commitment to the community.

Due to the long standing working relationship, their team understands our processes and has also been able to offer courtesy closings in Williamson County closings at Longhorn Title Company located at 3613 Williams Dr. #204 in Georgetown, TX and in Brazos County at University Title Company located at 1021 University Dr East in College Station, TX.

Closing on a New Construction Home (1)Closing at CentraLand (pre-pandemic)

Prior to your closing, you will receive a Closing Notice from one of Omega's Closing Coordinators that outlines the following:

  • Closing Location (where you need to be on the date/time of your closing)
  • Who will send the Closing Disclosure (this will have the total amount due at time of closing)
  • How to pay the title company (ONLY Bank Cashier's check accepted, no personal checks)
  • What to bring (you'll need your driver's license or government issued photo ID)
  • Overview of what Omega has provided the Title Company (ensuring a smooth closing for all)
  • Next steps for you to prepare

Helpful Tip: Save the phone number listed on the Closing Notice for the Title Company to your cell phone.

How to Prepare for Closing

1. Take Time Off From Work

Once your Close Date is scheduled, you'll need to arrange to be at the Title Company for about an hour to sign all of the documents. Don't forget to account for the time needed to drive to & from the Title Company.

Reminder: All buyers including non-purchasing spouses must be present.

COVID-19 Update: To minimize the risk of spreading the coronavirus, the title company is asking that only essential parties be present for closing and that you wear a mask for the meeting.

At Omega, our team is focused on providing on-time home completion to avoid closing delays and are proud to have 98% on-time closings. Very rarely, there might be a few outstanding items from your buyer walk that will need to be completed after closing.

We will do our best to schedule your closing for a date/time that works best for you. All closings are Monday to Friday and scheduled at the top of the hour from 9 AM to 4 PM.

Closing on a New Construction Home (2)

Helpful Tip: If possible, choose a time earlier in the day to ensure funding completes and you are able to get your keys at the time of closing.

2. Setup Property Insurance

You'll need to provide your lender/creditor with either proof of Homeowners Insurance or Rental Property Insurance (if purchasing an investment home).

(Video) What to Know About The Closing Process for New Construction Homes | Closing Process w/ Home Builders

If you do not have a lender and are paying cash for your home, you will need to provide proof of insurance to the title company.

With most insurance companies, you can begin working on this once the contract is signed and you have the details available about your home.

Typically, the insurance company will ask you questions about the size, construction and appearance of your home to determine the coverage needed, in addition to the sales price and also what type of coverage you need for your belongings.

3. Schedule Optional 3rd Party Inspection

Per the General Conditions Addendum in your New Home Contract, you have the option to have the property inspected by a licensed property inspector prior to closing.

The Third Party Inspection is at your expense and is not scheduled by Omega, refer to your contract or call your Omega Sales Agent for complete details about how to schedule & when the inspection must be done.

4. Schedule Utility Transfers

Builder Utility Services will be terminated one business day after closing.

All utilities need to be setup in your name - this includes:

  • Electric / Gas
  • Water

Other utilities you'll want to setup or schedule for setup in advance:

  • Trash / Recycling
  • TV / Phone / Internet

Helpful Resources with Utility Contact Info:

Temple, TX Local Guide

Belton, TX Local Guide

Bryan, TX Local Guide

College Station, TX Local Guide

(Video) ALWAYS Get a Home Inspection - New Construction Home Final Walkthrough

Georgetown, TX Local Guide

5. Review Closing Disclosure

If you are purchasing your home with a mortgage loan, your lender/creditor will provide the Closing Disclosure. Otherwise, for cash purchases, the Title Company will provide the Closing Disclosure.

The Closing Disclosure will outline all the money owed at time of closing, including your down payment, closing costs and money paid to or contributed by the seller.

Helpful Tip: You may want to compare the fees listed on your Closing Disclosure with the loan estimateyou received from your lender when obtaining loan approval. This will allow you to check with the lender if you notice any discrepancies in advance of closing.

ICYMI: Learn more about Builder Paid Closing Costs

6. Obtain Cashier's Check or Schedule Wire Transfer

Regulations prohibit the use of personal checks for real estate closings. You have two payment methods: Bank Cashier's Check or Wire Transfer.

Wire Transfer: You'll need to work with the title company and your bank to make arrangements several days in advance.

Cashier's Check: You'll need to work with your bank to request a Bank Cashier's Check for the full amount shown on your Closing Disclosure - the check should be made payable to the title company listed on your Closing Notice (not Omega Builders).

7. Update Your Mailing Address

You can submit change of address forms to USPS in advance of your move with a scheduled date to forward your mail predetermined.

Visit the Post Office Website to Update Your Mailing Address

Closing on a New Construction Home (3)

If your new home community does not have individual mailboxes then you will have a box in a cluster mailbox.

IMPORTANT: To obtain your mailbox key for your cluster box, you will need to take your Closing Disclosure or Settlement Statement and valid photo ID as proof of ownership to the city's main post office.

What Happens at Closing?

You'll arrive at the title company and wait for the Escrow Officer to start the meeting.

(Video) Huge Price Reduction On This New Construction Home In Ocala, Florida | Lantana Model | Renzo M

All of the documents have been signed in advance by the seller (one of Omega's authorized signers), this not only saves time at the closing table for you, but helps streamline the process for all Omega closings.

  • All buyers (each person listed on the contract & non-purchasing spouses) will sign the documents as reviewed by the Escrow Officer.
  • A copy of your ID will be made to verify your identity for notary purposes.
  • The Escrow Officer will notarize the documents as part of the signing process.

The home is officially closed and yours once "funding" has occurred Funding occurs when all documents are signed, approved, and money has been disbursed.

Helpful Tip: It can take 3-4 hours after closing for funding to occur - without funding, you cannot get the keys and take possession of your new home - be sure to keep this in mind when scheduling the time for your closing.

The Escrow Officer will provide you with a handful of documents during the meeting and you will receive a copy of all documents via your choice of emailed digital files or mailed CD files following the meeting.

Closing on a New Construction Home (4)

With the receipt of funds, you'll receive the keys to your new home!

What if Something Goes Wrong?

Just like things can go wrong on a job site, things can also go wrong when preparing for a closing - and that's OK, the important thing is to communicate with your closing coordinator and lender to make sure everyone is on the same page.

Our closing team carefully reviews the documents provided from the lender and title company to verify there are no mistakes. If you see your name misspelled or something else amiss, let us know immediately so we can get it fixed ahead of closing.

If you're running late or get stuck in traffic, call the Title Company and let them know so they can adjust accordingly.

I have the keys, now what?!

If you live in a community with an entrance gate or amenities like a swimming pool that have gated access, you will need to reach out to your Homeowner's Association (HOA) directly to get the access codes/cards.

There is a form regarding the HOA included in the closing documents you'll go over at the title company, this includes all the pertinent contact information.

Just in case, there are links to the homeowner's association websites on the community pages of Omega's website, but... the EASIEST way to find contact information for your HOA is to google it using your community name and "hoa" to find the website quickly.

For example, google "Hills of Westwood hoa" and the first result is for the homeowners association. There are a few really new communities that may not have a website yet, but our team would be happy to point you in the right direction if you get stuck.

Here are a few basics to do once you've closed & moved:
  • Store contract and closing documents in a safe place (digital and print)
  • Check your locks & garage openers/keypads to make sure everything locks properly
    • All exterior doors are rekeyed from the builder key to your own private key right before closing
  • Make sure your friends & family know about your move and your new address
  • Update your mailing address for all of your accounts, with work, school, etc.
  • Complete your Homestead Exemption and file any other tax exemptions
  • Meet your neighbors and exchange contact info for emergencies

You might also want to check to see if your neighborhood has a community on the Nextdoor website/app to meet more people in the area and discuss local/community events or plan a get-together!

(Video) Closing day on a new construction home | First time home buyer

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Get started with our printable Closing Check List:

Closing on a New Construction Home (5)


What are the 4 steps of a closing process for a home? ›

The steps leading up to the closing date include: Purchase agreement acceptance. Optional buyer home inspection. Loan origination.

What does closing out mean in new construction? ›

Closing on your new home is the "settlement" process of the real estate transaction after you've signed a contract for a new home. Settlement is when the legal transfer of property occurs and funds are transferred from the buyer to the seller.

What is the order of the closing process? ›

To close the deal on your home, you need a closing agent (also called a settlement or escrow agent). They'll coordinate document signing for all the parties, verify that both you and the seller have met the terms of the purchase agreement, and finally pay out all funds, transfer the title, and record the deed.

How much earnest money do you get for new construction? ›

When purchasing new construction, your earnest money deposit is usually 5% of the sales price. The builder typically mandates the amount as a part of their contract (see more on builder contracts below).

How soon after closing do I get the keys? ›

“Key” Takeaways

So, before you line up that moving truck, talk to your real estate agent and closing attorney about when you will be receiving the keys. Granted, unless you are closing after the Register of Deeds has closed for the day, you should realistically get your keys the same day as closing day.

What is the final stage of house construction? ›

FINISHING. Finally, your construction team will lay down the tiles, install electrical boards, cabinets, kitchen countertops etc. Once all elements are installed, your home can be painted or plastered with wallpapers. Consult with your family members about the finishing decor for your home.

What is a closing checklist? ›

A list of things to be done and items to be delivered before a transaction can be closed. Responsibility for each item is typically allocated among the parties on the checklist. The status of each item is updated periodically and circulated to the parties in preparation for closing.

What are the four entries required for closing? ›

What are the 4 closing entries? There are four closing entries; closing revenues to income summary, closing expenses to income summary, closing income summary to retained earnings, and close dividends to retained earnings.

Do you need a bigger deposit for a new build? ›

Lenders often ask for a higher deposit up-front

You might find that you need to save a larger deposit in order to secure a mortgage on a new build property. The reason for this is that a lender tends to set a lower maximum loan to value (LTV) ratio on new build mortgages.

Are new build deposits refundable? ›

Your deposit is non-refundable, unless the contract between you and the seller is breached. This is why it is important to have a contract in place, clearly stating what the terms are and what happens if either party pulls out.

How much deposit should you pay a builder? ›

Aim to push it down as much as possible, and don't agree to more than 25%. Always get a receipt for a deposit, as well as receipts for any materials it covers.

Do lenders pull credit day of closing? ›

Q: Do lenders pull credit day of closing? A: Not usually, but most will pull credit again before giving the final approval. So, make sure you don't rack up credit cards or open new accounts.

What do lenders check before closing? ›

Generally, they are looking for unusual deposits, sources of funds and reserves. I'll explain each of them below. Simply having money in your bank when you're at the closing table is not enough. The underwriter will review your bank statements, look for unusual deposits, and see how long the money has been in there.

How soon can I use my credit card after closing on a house? ›

How soon after closing can I use my credit card? If you already have a credit card (or opened a new card shortly after closing on a home mortgage loan) there's no need to wait before using the account.

How soon after closing do I get the money? ›

You will need to deposit the check at the bank. From that point, it can take up to seven business days for the money to appear in your account. Wire transfer: This action is the one that sellers more often take. On average, a wire transfer will take about 24-48 hours for the funds to reach you.

How soon after closing do you pay mortgage? ›

Since mortgages are paid in arrears and on the first of the month, your first mortgage payment typically comes at the start of the new month after you've lived in your new home for 30 days. This means that if you close on your house on May 25, your first payment is due July 1.

How long after framing is a house done? ›

The type of home you are building may mean a week or 2 longer. Upon completion of framing, you can expect to be in month 5 of your building, but again, that's if all is going according to your original plan.

How long does it take to build a house after the foundation is poured? ›

Depending on square footage, weather conditions, and the availability of workers and supplies, the construction of a new home can take anywhere from three months to over a year.

How many stages are there in a new build house? ›

The construction process of building a house is broken down into two distinct elements — pre and post weathertight stage (this is also called 'getting a house to shell').

How many walk throughs before closing on new construction? ›

Many builders schedule two visits during the first year — one near the beginning and the other near the end — to make necessary adjustments and to perform work of a non-emergency nature.

What happens at a new construction walk through? ›

During the walkthrough, the homeowner and construction representative inspect every surface, from floors to mirrors to walls. At that time, it's important to check the windows as well. That involves every part of the window, including the glass, screen, latches, locks, and frame.

Can your loan be denied at closing? ›

Can A Loan Be Denied After Final Approval? Although rarely, a mortgage loan can be denied after the borrower has signed the closing documents. In addition, borrowers have a 3-day right of rescission, during this period of time, they can withdraw from the loan.

Can I use my credit card while closing on a house? ›

Making a Large Purchase on Your Credit Card

Yes, you can use your credit card before your closing date, but do your best to keep your purchases small and pay off your balance swiftly.

What can affect your closing on a house? ›

Pest damage, low appraisals, claims to title, and defects found during the home inspection may slow down closing. There may be cases where the buyer or seller gets cold feet or financing may fall through. Other issues that can delay closing include homes in high-risk areas or uninsurability.

What is the most important document at closing? ›

The Deed: public record of the ownership of the property

It often includes a description of the property and signed by both parties. Deeds are the most important documents in your closing package because they contain the statement that the seller transfers all rights and stakes in the property to the buyer.

What to do 2 weeks before closing? ›

Two Weeks Before Closing:

Contact your insurance company to purchase a homeowner's insurance policy for your new home. Your lender will need an insurance binder from your insurance company 10 days before closing. Check in with your lender to determine if they need any additional information from you.

What should the first closing entry be? ›

Four entries occur during the closing process. The first entry closes revenue accounts to the Income Summary account. The second entry closes expense accounts to the Income Summary account. The third entry closes the Income Summary account to Retained Earnings.

What is closing entry give example? ›

Here are some examples of closing entries. (i) Opening stock account, Purchase account, Wages account, Carriage inwards account and Direct expenses account are closed by transferring to the debit side of the Trading and Profit and Loss account.

What is the first closing entry? ›

The basic sequence of closing entries is as follows: Debit all revenue accounts and credit the income summary account, thereby clearing out the balances in the revenue accounts. Credit all expense accounts and debit the income summary account, thereby clearing out the balances in all expense accounts.

Why do banks not like new builds? ›

This is because most lenders believe new home buyers are paying a premium prices for new homes and the home will lose value the moment you move in. It can be very difficult to re sell a new home (at the fair market price) whilst the house builder's sales staff is still on the development.

How much less should you offer on a new build? ›

Latest analysis shows that buyers of new build homes are currently negotiating a typical discount of around 14% from the asking price.

What percentage do you have put down on a new build? ›

Generally, you'll be required to have a 15% deposit for a new-build house and a 25% deposit for a new-build flat. This is in contrast with the 10% deposit (or even 5%) usually required on other types of properties.

How does a deposit work on a new build? ›

For new homes, the deposit is usually payable directly to the builder, and held “in trust” by the builder's lawyer. Builders who are selling “pre-construction” homes may also require higher deposits than normally paid for re-sale properties. This allows the builder to use the money toward ongoing construction costs.

Are 5% deposits only for new builds? ›

You must have a deposit of between 5% and 9% Any homebuyer can apply for a mortgage, not just first-time buyers. Unlike the Help to Buy equity loan, the property does not have to be a new-build home.

At what stages should I pay my builder? ›

For small projects payments for building work can be based on a payment schedule. These often follow milestones such as 20% foundations, 30% walls, 20% roof, 20% services, 10% completion.

Should contractors ask for money up front? ›

Do You Have to Pay a Deposit? Most contractors will request a downpayment to add you to their schedule and also to ensure the project continues to move forward after the contractor has purchased materials. Reputable contractors are happy to negotiate a downpayment, including the amount and payment terms.

Why do builders ask for a deposit? ›

Builders sometimes ask for a deposit to pay for the materials to start the agreed job. If this happens after you agreed the contract: ask to see the invoice from the builder's supplier. pay the amount invoiced and insist on a receipt.

How many steps are in the closing process? ›

House Closing Process: The 12 Steps of Closing.

What is the timeline for closing on a house? ›

Typically, you can expect closing on a house to take 30 – 45 days. As of September 2021, the average time to close a home purchase was 50 days, according to the Ellie Mae Origination Insight Report.

What is the fastest you can close on a house? ›

“With a good broker, a solid documentation package, and persistence, some buyers can close in as fast as two weeks.” Buyers who pay cash for their new home — instead of going through the mortgage application process — typically close faster. But even when paying cash, it often takes at least a couple of weeks to close.

What happens 2 weeks before closing? ›

Two Weeks Before Closing:

Contact your insurance company to purchase a homeowner's insurance policy for your new home. Your lender will need an insurance binder from your insurance company 10 days before closing. Check in with your lender to determine if they need any additional information from you.

What are the three points at closing? ›

Discount points are a type of pre-paid interest, and is given directly to the lender at closing for the reduction of the interest rate on your mortgage loan. So, the more points you pay, the lower the interest rate goes on the loan. You can pay up to 3 or 4 points, depending on how much you want to lower the rate.

Who signs first at closing buyer or seller? ›

Who Signs Closing Documents First, Buyer or Seller? Typically, the seller signs the closing documents first, before the buyer even arrives at the office where the closing is taking place.


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