The South Dakota Home-Buying Process: Your Step-by-Step Checklist

Visit homes in person whenever possible. Take notes and photos. Pay attention to the condition of the roof, foundation, and heating system — these are especially important in South Dakota where extreme winters put heavy demands on structures. Narrow down your choices and discuss your observations with your agent before deciding which home to pursue.

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South Dakota does not mandate a single state-approved purchase contract form. Your brokerage will use its approved form or the South Dakota Association of REALTORS form. Your agent will walk you through the key terms: purchase price, earnest money amount, inspection contingency period, financing contingency, closing date, and allocation of costs. Read every section. Ask your agent to explain anything you don't understand before you sign.

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When your offer is accepted, you'll deliver earnest money — a good-faith deposit that shows you're serious. In South Dakota, your agent or the responsible broker must deposit your earnest money into the brokerage trust account promptly, typically within one to three business days of receipt. The money is held until closing, when it applies toward your down payment or closing costs. If you back out for a reason not covered by a contingency, you may forfeit the deposit.

Cost: $1,000-5,000 typical (applied to purchase at closing)

After the NAR settlement, sellers can no longer advertise buyer-broker compensation through the MLS. Your buyer's agent compensation was spelled out in your buyer representation agreement. As part of your offer, you may ask the seller to provide a concession to help cover your agent's fee — this is negotiated in the purchase contract, not through MLS data fields. Your agent can advise you on whether to include this request given current market conditions.

Cost: varies

South Dakota law under SDCL 43-4-37 through 43-4-44 requires the seller of a one-to-four unit residential property to deliver a completed SD Real Estate Condition Disclosure Statement before you accept an offer. If the seller delivers it after you've signed the purchase agreement, you have three business days after you receive it to back out — in writing — without penalty. The disclosure covers the foundation, roof, HVAC, plumbing, electrical, known mold or asbestos, well and septic status, and other material conditions. Read every item. Ask your agent about anything flagged.

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If you're buying a home built before January 1, 1978, federal law requires the seller to give you an EPA-approved lead disclosure form, share any existing lead paint reports, and provide the EPA pamphlet 'Protect Your Family From Lead in Your Home.' You have 10 days to conduct a lead-based paint inspection or risk assessment at your own expense before the contract becomes binding. You can waive this window, but it's usually not recommended for older homes.

Cost: $0 (inspection optional, ~$300-500 if you hire an inspector)

If you're purchasing a condominium in South Dakota, the seller is required under SDCL 43-15A to provide a disclosure packet that includes the declaration and bylaws, current rules and regulations, the operating budget, the most recent financial statement, any pending assessments or litigation, and known defects in common elements. Review these documents carefully — HOA rules affect what you can do with the unit, and special assessments can cost thousands of dollars unexpectedly.

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In South Dakota, closings are typically handled by a title insurance company. Your agent will help you select a title company to open escrow, conduct a title search, and issue a title commitment. The title search checks for any liens, judgments, unpaid taxes, or encumbrances on the property. Review the title commitment when you receive it and flag anything unexpected — like easements or deed restrictions — with your agent.

Cost: $200-500 typical for title search

As soon as you're under contract, send your signed purchase agreement to your lender so they can start the formal loan application and order the appraisal. Your lender will issue a Loan Estimate within three business days of receiving your complete application. Review it carefully — it shows the interest rate, monthly payment, and all estimated closing costs. Compare it to any other lenders you spoke with.

Cost: $0 (appraisal fee billed separately)

A home inspection is one of the most important steps you'll take as a buyer. Hire an experienced inspector independently — not one suggested only by the seller's agent. In South Dakota, look for inspectors who are familiar with local climate issues: roof snow-load damage, ice dams, frozen pipe history, and heating system performance are all relevant given South Dakota winters, especially in the Black Hills and western plains regions. Attend the inspection in person so you can ask questions as the inspector works.

Cost: $350-600 typical

Your inspector will provide a written report, usually within 24 hours. It will list every issue found, from minor maintenance items to major defects. Work with your agent to sort them into three buckets: safety hazards or structural problems (ask for repair or price reduction), significant systems issues (negotiate), and routine maintenance items (plan to handle yourself after purchase). Don't panic at a long list — older homes especially will have many items.

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If the inspection reveals significant issues, you have options. You can ask the seller to make specific repairs before closing, request a price reduction so you handle repairs yourself, or ask for a closing cost credit. The seller does not have to agree to anything, but material defects discovered during inspection give you negotiating leverage. Your agent will draft an addendum or amendment to the purchase contract reflecting any agreed changes.

Cost: $0

Standard home inspections don't typically cover everything. In South Dakota, consider adding a radon test (South Dakota has elevated radon levels in many areas), a well water quality test for rural properties, and a septic system inspection for homes not on public sewer. If the property is older and you have concerns about mold or methamphetamine contamination — which is a required disclosure under South Dakota law — ask your agent about adding those tests.

Cost: $150-400 per specialty inspection

Your lender will ask you to complete a full Uniform Residential Loan Application (Form 1003). Be thorough and accurate — any discrepancies between what you report and what the lender verifies can delay or kill your approval. You'll also choose your loan type (conventional, FHA, VA, USDA) and lock in your interest rate. Ask your lender to explain all costs before you lock.

Cost: $0 (application fee varies by lender)

Your lender will order an independent appraisal to confirm the home's market value supports the loan amount you're borrowing. You typically pay for the appraisal upfront or it is rolled into closing costs. The appraiser is selected by the lender — you don't choose them. If the appraisal comes in below your offer price, you'll need to negotiate with the seller, make up the difference in cash, or walk away if your contract has an appraisal contingency.

Cost: $450-700 typical

After your application goes to underwriting, the lender's underwriter may ask for additional documents — called conditions. These could include letters explaining a gap in employment, documentation of a large deposit in your bank account, or updated financial statements. Respond as fast as possible. Delays in sending requested documents are one of the most common reasons closings get pushed back.

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Your lender is required to give you a Closing Disclosure at least three business days before your closing date. Compare it side-by-side with the Loan Estimate you received earlier. Certain fees (like the lender's origination charge) cannot increase at all. Others (like title services you chose) can change. Flag any surprise increases to your lender immediately. The three-day waiting period gives you time to review before you're sitting at the closing table.

Cost: $0

Your lender will require proof of homeowners insurance before funding your loan. Start shopping at least two weeks before closing. Get quotes from multiple insurers. In South Dakota, ask about coverage for wind and hail damage — the state's severe weather can make these coverage levels matter. Make sure your policy is set to begin on the closing date. Provide your lender with the insurance binder or declarations page as soon as you have it.

Cost: $1,000-2,500 per year typical for SD (varies by property and coverage)

Clear to Close means your lender's underwriter has approved all conditions and your loan is ready to fund. You'll usually get this notification one to three days before your closing date. Once you have CTC, coordinate with your agent and the title company to confirm your exact closing time and location. Don't make any major financial changes — new credit accounts, large purchases, or job changes — after receiving CTC because they can cause your approval to be pulled.

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Schedule a final walkthrough of the property — typically within 24 hours before closing. The goal is to confirm the home is in the same condition as when you made your offer, that any agreed repairs were completed, and that the seller hasn't removed fixtures or appliances included in the sale. Bring your purchase contract and inspection report with you so you can check items off. If something looks wrong, contact your agent immediately before you get to the closing table.

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Review your Closing Disclosure to know exactly how much you need to bring to closing. Wire funds — or bring a cashier's check — to the title company's escrow account before closing day. Personal checks are almost never accepted. Be very cautious about wire fraud: call the title company at a verified phone number (not one from a recent email) to confirm wiring instructions before sending. Wire fraud is common in real estate closings.

Cost: Down payment + closing costs per Closing Disclosure

In South Dakota, lender's title insurance is required by your mortgage lender and protects them if a title problem surfaces after closing. Owner's title insurance protects you — the buyer — and is optional but strongly recommended. It's a one-time premium paid at closing and covers you for as long as you own the property. Ask your title company to include it on the settlement statement and confirm coverage before closing day.

Cost: $500-1,500 typical (one-time premium, varies by sale price)

Closing takes place at the title company's office. You'll sign a large stack of documents including the promissory note (your promise to repay the loan), the deed of trust or mortgage, the Closing Disclosure, and the title transfer paperwork. The title company will coordinate the signing and explain each document before you sign. Bring a valid government-issued photo ID. Budget one to two hours for the appointment.

Cost: $0 (closing costs already wired or brought as cashier's check)

South Dakota charges a real property transfer fee under SDCL 43-4-21 at $0.50 per $500 of the sale price — that works out to $1.00 per $1,000, or 0.10%. On a $300,000 home, the transfer fee is $300. By convention this fee is shown as a seller expense on the Closing Disclosure, but the purchase contract controls who actually pays it — verify your contract language. Your title company handles collection and payment to the county at closing.

Cost: $0.50 per $500 of sale price (e.g., $300 on a $300,000 home)

After all documents are signed and funds are disbursed, the title company will send the deed and mortgage to the county register of deeds for recording. Recording is what officially makes you the legal owner of the property in public records. Your title company will confirm recording, and you'll receive a copy of the recorded deed in the mail — typically within a few weeks. Keep it in a safe place along with your other closing documents.

Cost: $30-60 typical recording fees

Once the deed is recorded and funds are disbursed to the seller, you receive the keys and take possession of your new home. The exact timing of key transfer is set by your purchase contract — typically upon closing and recording. Coordinate your moving truck or helpers accordingly. Change the locks on day one as a basic security step, since you don't know how many copies of the old keys exist.

Cost: $50-200 to rekey locks

Collect and keep all documents from closing, including the Closing Disclosure, deed, title insurance policy, loan documents, and any warranties for appliances or systems. Store digital copies in a secure cloud folder and paper copies in a fireproof location. These documents are critical for future tax filings, refinancing, and eventual resale. You'll need your Closing Disclosure to calculate your cost basis when you sell.

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