What Happens Between Under Contract and Closing?

Once a home goes under contract, many buyers and sellers assume the hard part is over. In reality, the period between contract acceptance and closing is one of the most important and active phases of a real estate transaction. This window is when the property, the financing, and the paperwork are all vetted, verified, negotiated, and finalized.

This article explains what happens between under contract and closing, including timelines, inspections, appraisals, financing, title work, and the most common reasons closings get delayed.

Understanding what happens between under contract and closing helps buyers avoid surprises, sellers prepare for requests, and both sides move toward a smooth closing with fewer delays. This guide breaks down the process step by step, explains who is responsible for what, and highlights where deals commonly stall.

Buyer vs. Seller Responsibilities: At a Glance

What “Under Contract” Really Means

A property is considered under contract once the buyer and seller have signed a fully executed purchase agreement, also known as a real estate contract. At this point, the seller has agreed to take the home off the market, and the buyer has committed to moving forward under specific terms.

However, under contract does not mean sold. Most contracts include contingencies, deadlines, and conditions that must be met before ownership transfers. If these conditions are not satisfied, the deal can be delayed or canceled.

The time between under contract and closing typically lasts 30 to 45 days, although it can be shorter or longer depending on financing type, inspections, and local practices.

The Steps Between Contract and Closing

Opening Escrow and Delivering the Deposit

Shortly after the contract is signed, escrow is opened with a title company or closing attorney. This neutral third party holds funds and documents while the transaction progresses.

The buyer then submits the earnest money deposit according to the contract terms. This deposit shows good faith and is typically applied toward the buyer’s closing costs or down payment at closing. If the buyer fails to deliver the deposit on time, the seller may have the right to cancel the contract. Timely delivery is one of the first signals that the transaction is on track.

Scheduling and Completing the Home Inspection

One of the earliest steps after going under contract is the home inspection. Buyers usually have a limited inspection period, often 5 to 15 days, to complete inspections and decide how to proceed.

A licensed inspector evaluates the home’s major systems, including the roof, electrical, plumbing, HVAC, structure, and visible components. The inspection report outlines findings, safety concerns, deferred maintenance, and potential repairs.

It is important to understand that inspections are informational. No home is perfect, especially resale properties, and even new construction isn’t perfect. The purpose is to identify material issues and assess risk, not to create a wish list.

Negotiating Repairs or Credits

After reviewing the inspection report, the buyer typically has three options:

• Proceed as is
• Request repairs or a credit
• Cancel the contract within the inspection period

However, these options ultimately depend on the contract. Negotiations often focus on safety issues, structural concerns, or major system failures rather than cosmetic items. Sellers may agree to make repairs, offer a closing credit, reduce the purchase price, or decline requests altogether.

Buyer Loan Application and Underwriting

If the buyer is financing the purchase, the loan process runs alongside inspections. Even buyers who are preapproved must complete full underwriting once under contract. This includes submitting updated income documentation, bank statements, employment verification, and explanations for any large deposits or credit inquiries. The lender orders a credit refresh and begins underwriting the loan.

Underwriting can take several weeks and often involves requests for additional documentation. Delays commonly occur when buyers change jobs, make large purchases, move money between accounts, or miss paperwork deadlines. Buyers can reduce risk by following a clear checklist of things to avoid during loan approval once they are under contract.

The Home Appraisal

For financed purchases, the lender orders an appraisal to confirm the home’s value supports the purchase price. An independent appraiser evaluates comparable recent sales, condition, location, and market trends.

If the home appraisal comes in at or above the contract price, the transaction moves forward. If it comes in low, the buyer and seller must renegotiate.

Low home appraisals can lead to price reductions, buyer cash contributions, contract cancellations, or disputes if neither side is willing to adjust.

Title Search and Title Commitment

While inspections and financing are underway, the title company conducts a title search. This process confirms the seller has clear legal ownership and identifies any liens, judgments, unpaid taxes, or easements attached to the property.

The title commitment outlines what must be resolved before closing. Common issues include unpaid mortgages, HOA balances, municipal liens, or recording errors. Most title issues are resolved behind the scenes, but unresolved problems can delay or prevent closing if not addressed promptly.

HOA and Condo Document Review

If the property is in a homeowners association (HOA) or condominium, additional legal steps and deadlines apply. Sellers are typically required to provide a comprehensive package of documents to the buyer for review.

Buyers usually have a specific “right to cancel” period (often 3 days in Florida for condos, but check your specific contract) to examine these documents and decide whether to proceed. During this window, it is vital to review:

• Financial Health: Review the association’s financials, including the current budget and the “reserve account” (funds set aside for major future repairs like roofing or paving).
• Rules and Restrictions: Check for “lifestyle” rules such as pet restrictions (weight/breed), vehicle parking rules, and leasing restrictions.
• Dues and Assessments: Confirm the monthly or quarterly dues and check for any “Special Assessments”—extra one-time fees for major community projects.
• The Approval Process: Many associations require an application, a background check, and a formal interview before the buyer is approved to close.

Insurance and Risk Management

Buyers are required to secure homeowners insurance before closing. The lender needs proof of coverage with the correct dwelling amount, deductible, and endorsements. In some areas, insurance underwriting can trigger additional inspections, such as wind mitigation or roof certifications. These inspections can affect premiums or eligibility. Sellers should maintain insurance coverage through the day of closing. Buyers should avoid gaps in coverage that could delay funding.

Final Loan Approval and Clear to Close

Once underwriting is complete and all conditions are satisfied, the lender issues a final approval commonly referred to as clear to close.

At this point, loan documents are prepared, the closing disclosure is finalized, and the closing date is confirmed. Buyers typically receive their closing disclosure at least three business days before closing. Any last-minute changes can restart waiting periods, so accuracy and timing matter.

The Final Walkthrough

The buyer completes a final walkthrough shortly before closing. This is not another inspection, but a confirmation that the property is in the agreed condition. The walkthrough verifies that repairs were completed, the home is vacant if required, and no new damage has occurred. Appliances and systems are typically checked for basic functionality. If issues arise during the walkthrough, they must be resolved before closing or documented in writing.

Closing Day and Transfer of Ownership

On closing day, all documents are signed, funds are transferred, and ownership is recorded. Buyers sign loan documents, closing statements, and affidavits. Sellers sign transfer documents and finalize payoff authorizations.

Because closing costs are part of the final numbers being signed and funded, it helps to understand who pays for closing costs and how credits, prorations, and lender fees affect the settlement statement. Once the transaction is complete, keys are released. The buyer officially becomes the new owner, and the seller receives proceeds according to the settlement statement.

Common Issues That Can Delay Closing

Even well-managed transactions can encounter obstacles. Common delays include:

• Incomplete buyer documentation
• Low appraisals (Value not meeting contract price)
• Title defects (Judgments, liens, or clouds on title)
• Insurance complications (Difficulty securing a policy or high premiums)
• HOA approval delays (Slow estoppel or background checks)
• Repair disputes (Failure to complete work or poor workmanship)
• Last-minute financial changes (Buyer credit score drop or new debt)

Why This Phase Matters So Much

The period between under contract and closing is where deals are protected or lost. Every deadline, document, and decision matters. Buyers who understand the process feel more confident and avoid costly mistakes. Sellers who prepare properly reduce friction and keep timelines intact.

This phase is not passive. It requires attention, coordination, and problem-solving from all parties involved. Understanding what happens between under contract and closing can make the difference between a smooth closing and an unnecessary setback.

Final Thoughts

Going under contract is a major milestone, but it is only the midpoint of the transaction. What happens between under contract and closing determines whether the deal reaches the finish line smoothly or encounters unnecessary stress. A clear understanding of each step helps buyers and sellers stay informed, make better decisions, and move toward closing with confidence.

Frequently Asked Questions

What does “under contract” mean in real estate?

A home is considered under contract when the buyer and seller have signed a fully executed purchase agreement and the seller has agreed to move forward under the contract terms. The sale is not final until contingencies, title, financing, and closing requirements are completed.

How long does it take to close after a home goes under contract?

Most closings happen in about 30 to 45 days, but the timeline can be shorter or longer depending on the type of financing, appraisal timing, inspection negotiations, title work, and HOA document turnaround.

Can a seller back out once the home is under contract?

In many cases, sellers cannot cancel simply because they changed their mind. The contract terms matter, and there are limited situations where a seller may be able to cancel. If a seller wants out, it usually creates legal and financial consequences.

Can a buyer back out once the home is under contract?

Yes, buyers may be able to cancel during certain contingency periods, such as the inspection period, appraisal contingency, financing contingency, or HOA document review period. Whether the buyer gets their deposit back depends on the contract deadlines and the reason for cancellation.

What does “clear to close” mean?

Clear to close means the lender has finished underwriting and the loan file has met all conditions needed to prepare final loan documents. It is one of the last milestones before closing, but the closing disclosure and final signing still need to happen.

What happens if the appraisal comes in low?

If the appraisal is lower than the purchase price, the buyer and seller usually renegotiate. Options can include a price reduction, the buyer bringing additional cash to cover the difference, disputing the appraisal if there are strong comps, or canceling if the contract allows.

Do buyers have to do a final walkthrough?

Final walkthroughs are strongly recommended. The walkthrough confirms the property is in the agreed condition, required repairs are complete, and there has been no new damage since the inspection.

When does the buyer transfer closing funds?

Buyers typically wire funds before closing, based on the final amount listed on the closing disclosure or settlement statement. Your closing agent will provide the exact instructions and timing.

What should buyers avoid doing between under contract and closing?

Avoid opening new credit accounts, financing furniture or cars, running up credit card balances, changing jobs without discussing it with your lender, or moving money around in a way that creates documentation issues. These actions can delay or even derail loan approval.

What can sellers do to prevent closing delays?

Sellers can respond quickly to repair requests, keep the home accessible for inspections and the appraisal, complete agreed repairs on time, provide HOA and disclosure documents promptly, and avoid canceling utilities or insurance before closing.

What are the most common reasons closings get delayed?

The most common issues are loan documentation delays, appraisal timing or low valuations, title defects, insurance underwriting problems, HOA document and approval delays, and unresolved repair or credit negotiations.

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About the Author

Michelle Gibson is a Realtor with Hansen Real Estate Group Inc. and has specialized in residential real estate since 2001 in Wellington, Florida, and nearby communities. She has guided hundreds of transactions from contract to closing and has handled complex inspections, low appraisals, HOA issues, and financing delays firsthand. She helps buyers and sellers make confident decisions with clear guidance on pricing, negotiations, inspections, and closing timelines.

Areas of service include Wellington, Lake Worth, Royal Palm Beach, Boynton Beach, West Palm Beach, Loxahatchee, Greenacres, and surrounding areas.