According to the Urban Land Institute, the U.S. real estate market will rebound in 2021 and trend even higher in 2022, particularly single-family homes. And that means that for the first-time home buyer, there’s never been a better time to get in on the housing market.

But first, you have to get through the home closing process, and that process can be expensive. In fact, if you’re buying or refinancing a median-value home (around $265,000), you can expect to pay anywhere from $5,000 to $12,500 in closing costs.

That said, the process is much smoother if you plan ahead. Here’s what would-be homeowners need to know about the home closing process.

Getting Started with the Home Closing Process

Whether you’re buying a new construction home or a preexisting structure, the closing process is more or less the same.

First, you’ll need to hire an attorney. The attorney will help you navigate the closing process without any legal snags.

Second, you’ll open an escrow account, which is set up by a third party on behalf of the buyer and seller. This ensures a smooth transfer of money without anyone getting cheated, since the account holds all money and relevant documents until the ownership transfer is complete.

Third, make sure that you know your clauses. Andrew The Home Buyer identifies five big ones: financing, home inspection, selling current home, early occupancy, and HOA clauses. These will all shape what comes next in home closing, and an attorney can help you understand the legalese.

From there, you can negotiate your closing fees. This is why we told you to hire an attorney first—they can help you avoid junk fees that prey on consumer ignorance.

A Smart Homeowner is an Insured Homeowner

At this point, you need a homeowner’s insurance plan, including title insurance.

Homeowner’s insurance provides financial protection if your home is damaged. You’re probably already familiar with this one, since most lenders require proof of homeowner’s insurance before or during closing. Then there’s title insurance, which protects homeowners and lenders against claims questioning legal ownership of the property.

Trust us: a smart homeowner is an insured homeowner.

Make Sure Your Finances are in Order

If you haven’t already, make sure that your finances are already in order.

Ideally, you should try to get pre-approved for a mortgage before you kick off the closing process. Unless you happen to be an all-cash buyer (hint: most people aren’t), you’ll need a mortgage, and nothing slams the brakes on the home closing process faster than the inability to pay. Pre-approval also lets you know what homes are in your price range.

From there, you’ll get into closing-specific costs. These include things like earnest money (a down payment showing the current owner you’re serious), appraisal, origination, insurance fees, lender credits, and inspection fees, among others.

More Tips and Tricks for the First Time Home Buyer to Navigate the Housing Market

The home closing process isn’t exactly short, but the final result is worth it—a home where you’ll make memories and build a life with the people who matter most to you.

Looking for more tips and tricks to navigate the housing market? Make sure to check out our blog for more great posts like this one.