Residential Closing

Residential Closing

Chad D. Lemmons, Esq.
Kelly & Lemmons, P.A.

200 Crossroads
7300 Hudson Boulevard
Saint Paul, MN 55128
Tel: (651)-224-3781
Fax: (651)-223-8019

“Closing” or settlement or “escrow” is listed as one of the top ten problem areas that occurs in a real estate transaction. This final step to your purchasing of property can go smoothly if you take a few precautions beforehand. Knowing what questions to ask and reviewing all documents and real estate terms well in advance of the closing day will prepare you for a hassle-free and smooth closing.

1. What is closing or escrow and what is involved in opening escrow?
At closing, an impartial third party, an escrow officer or title attorney, sees that the Buyer and the Seller perform as they have agreed they would. The closing agent keeps or holds any funds or documents safely until all the details have been settled and disburses them to the proper parties at the proper time. Escrow and closing may assist in the transfer of real estate, in the transfer of personal property included with real property, or in the processing of a loan. Opening escrow or starting the closing process, simply involves visiting the office of any firmed that handles closings and escrow’s, then handing over the deposit moneys and giving instructions for the transaction. Both the buyer and the Seller submit escrow or closing instructions, and so does the lender if there is one. Anyone who’s involved in the transaction may open escrow. Generally, the real estate agent takes the initiative and opens the escrow. In for-sale-by-owner transactions, which involve no agent at all, either the buyer or the seller or both together may open escrow.

2. What should a purchase agreement include?
A purchase agreement must state clearly the terms of the sale and what must occur before the property can change hands. The agreement should state what will happen if the agreement is canceled, what personal property is to be included in the sale (be specific!), the date for the closing of escrow and what will happen if it is delayed, prorations and the date to be used for computing them, default provisions or what will happen if one party doesn’t live up to the agreement, who pays for property inspections and any deficiencies that they may uncover, financing arrangements and the occupancy date.

See sample of attached Purchase Agreement, Financial Addendum, “As Is” Addendum and Inspection Addendum.

3. How much will the closing costs be and what are they?
Generally, your closing costs will come out to between 4 and 5 percent of your purchase price. The closings costs will include title searches, government taxes, notary fees, loan fees, escrow fees, recording fees, reconveyances fees, prorations and sales commissions.

Closing Checklist


  • Grounds
  • Check driveway and walls for deterioration.
  • Check wooden fences.
  • Check window wells, windows, dry wells, screens, and storm drains.
  • Check retaining walls for cracks, bulges and leans.
  • Check all landscaping.
  • Check for proper drainage.


  • Check for proper drainage.
  • Check for insect infestation.
  • Check for settlement cracks, spalling, bowing and settling.


  • Check for finish.
  • Check caulking joints.
  • Check stucco for soundness.
  • Windows and Doors
  • Check for damaged screens and broken glass.
  • Check weather striping and caulking.
  • Check for rot.


  • Check for loose, damaged or missing shingles.
  • Check soffits for signs of moisture buildup.
  • Check flashings for lifting and poor seal.
  • Check gutters for damage.


  • Check for leaking faucets.
  • Check well for proper seal certification or operation.
  • Check septic system for operation and certification.


  • Check for mortar joints.
  • Check for condition.
  • Check for flue cleanliness.


  • Check for condition of incoming service wire.
  • Porch and Patio
  • Check for proper construction.
  • Check all supports and beams.


  • Check for equipment operation and tools.
  • Check for manuals and guides.


  • Check for painted and finished walls for condition.
  • Check baseboards.
  • Check for rug and carpet wear and tear.
  • Check all stairs and railings.
  • Check ceilings for leaks.


  • Check for signs of roof, or flashing leaks.
  • Check chimney and chimney cap for smoke and water stains.
  • Check roof rafter for straitness
  • Check insulation.
  • Check ventilation.


  • Check for distribution overloads.
  • Test ground fault interrupters.
  • Check circuits for over fusing or test circuit breakers.
  • Check all plugs, connectors and covers.

Heating and Cooling Systems

  • Check for heating system condition and cleanliness.
  • Have a serviceman check operation.
  • Test and start all systems.
  • Check flue for corrosion or leaks.
  • Check fan for quietness.


  • Check for faucets, drains and traps.
  • Check galvanized, copper and plastic plumbing for leaks.
  • Check toilet operation.


  • Check for cracks, breaks or bowing of walls.
  • Check for leaks and water stains.
  • Check for wall condensation.
  • Check for rotting sills and window frames.
  • Check for sagging floor joists.
  • Check crawl spaces for insulation and vapor barriers.
  • Check sump pump operation.


  • Check for appliance operation.