Indiana Homebuying and Closing Process


  • Indiana's homebuying process is similar to other states where a real estate attorney (or a title company) is used to consummate the transaction and prepare all the closing documents.
  • In Indiana, buyer and seller often consummate the transaction at the same closing table.
  • Indiana has it's own customs and procedures around inspections: items disclosed by the seller usually cannot be grounds for terminating the contract simply becuase they're found again during inspections.

Step by Step

Part 1: Disclosures, inspections, and title


  2. Concurrently, a deposit, or earnest money, is paid to the buyer's attorney, broker, or escrow agent (never to the seller directly). Sometimes this deposit may be broken into two consecutive payments.
  3. The signed contract is sent to an attorney or title company to begin the title search and all other work related to transferring and changing the title to the new owners and preparing the title commitment.
  4. The buyer reviews and signs off on any disclosures. These disclosures vary based on property type, but often include things like known flaws with the property, prior improvements or repairs, and potential environmental hazards. A standardized disclosure form called a seller's residential real estate disclosure is required by Indiana law to be provided by the seller as an addendum to the contract and must be signed by both buyer and seller (or the deal does not proceed). NOTE: the pre-disclosed 'defects' in a seller's disclosure cannot be used as grounds for termination of the contract after they're revealed in inspections. Buyers are advised to read these disclosures carefully before paying for inspections.
  5. The buyer elects to perform inspections on the property if agreed upon in the contract. Any inspections must be completed by a number of days after the signing of the contract (which can be referred to as the inspection contingency date). The types of inspections vary by property type and situation (and locale), but in Indiana, a home inspector generally inspects the home, and a lead-paint inspection, mold inspection, pest inspection, and a radon inspection are somewhat common as well. Check your contract- in some areas, each inspection may have its own number of days from signing within which it must be completed.
  6. If buyers find any 'major defect' during inspections that were not disclosed by the seller, they can request, in writing, that the seller remedy the defect (either through making repairs or providing closing cost credits) to the buyer's and a licensed inspector's satisfaction. If the seller is unable or unwilling to remedy the major defect, a the buyer can walk away without penalty. However, if a buyer finds a major defect that was previously disclosed, they cannot terminate the agreement without losing their earnest money deposit.
  7. The buyer may also negotiate for a home warranty that covers major appliances from failure for a time period after the sale, typically a year.

Part 2: The mortgage process


  1. A buyer submits a loan application to their lender, either directly or through a mortgage broker. See a sample Uniform Residential Loan Application used in Indiana. Of course, well before this point, a pre-qualification or pre-approval with a lender should have been acquired.
  2. Within 3 days, the lender sends a "Good Faith Estimate," or GFE, to the buyer that is a breakdown of estimated closing costs. The final costs are likely to deviate from this estimate. *See a sample GFE at](
    • Explanation of any credit inquiries
  5. An appraisal is ordered by the lender or mortgage broker via a central directory of appraisers (often called an Appraisal Management Company or AMC). Choosing a specific appraiser is not possible, but a mortgage broker can reject an appraiser and ask for a new one. If the appraisal comes in lower than the purchase price, the buyer can often back out of the deal without penalty - it's important to check your specific contract for any appraisal contingency clause. If absent, the appraisal contingency is functionally built in to the loan contingency, as appraisal at or above purchase price is a condition lenders require.
  6. The loan contingency (also known as a mortgage contingency) is removed by the buyer before the expiration of the loan contingency date as defined in the contract as a number of days from the signing of the contract. This contingency is removed by sending a copy of their loan commitment or approval to the listing agent or other designee (such as a real estate attorney). If the buyer/borrower is unable to obtain financing, they can terminate the contract by providing a rejection letter from the lender to the listing agent or attorney. They can also request an extension to the loan contingency date in writing if the process is taking longer than expected.

Part 3: The closing itself

The closing process itself general takes place at one table (either at the office of an attorney, lender, or title company), where buyers sign all documents related to their loan and the transaction itself. After all documents are signed and payments exchanged, the deed is recorded with the county. Buyers generally take possession of the keys immediately thereafter unless a separate agreement has been reached to allow the seller to stay in the property for a period after closing. The detailed steps that make up closing are:

  1. A final cash figure for what a buyer needs to bring to the closing in the form of a cashier's check is calculated by the closing attorney or lender. This is based not only on a mortgage's closing costs but factors like property taxes and utilities paid in to date by the seller.

