Closing day is the culmination of your real estate transaction . . . the day the property changes hands. The buyer and seller will sign all the required legal documents and exchange the monies that make the settlement final.
Depending on where you live, the process is called the settlement, the transfer, the closing, passing paper, or going to escrow. The actual event may be held in the county courthouse, at a title company, at the lending institution, the real estate office, or at the attorney’s office.
There is no other aspect of real estate that varies more than the actual set up of the closing. Local custom dictates how it’s done. In one area, the buyers, sellers, attorneys, brokers, and a paralegal from the lender may gather around a long table. At the other end of the spectrum, the details can be handled through the mail by a special escrow company.
Whatever the practice, the basic transaction is the same. The seller proves a marketable title, the buyer pays for the property, and the seller hands over the deed. If there is new financing, the settlement includes the signing and delivery of a bond and mortgage, and in some states, a trust deed. The deed is a bill of sale for the real estate. Sellers do not sign and deliver a deed until the money for the sale has been received. As the buyer, you cannot pay until you receive the mortgage loan. The lender will not turn over the money without receiving a mortgage. You cannot sign the mortgage until you own the property.
Obviously, the transactions must take place at one time and in a very specific order. If for some reason you cannot attend the closing, arrangements can be made for your signature on the various documents. Then all you’ll have to do is pick up the keys!
Closings can last anywhere from about an hour to an hour and a half. During this time, you will sign all the required legal documents and exchange all money in order to make the settlement final.
• The usual documents that must be signed are the deed, which conveys title of the property to the buyer; the mortgage, which is a lien against the purchased property; and the settlement statement, which lists all closing costs and related fees. In addition there are many other documents that must be signed, they will be explained at the closing table by the closing agent and/or your attorney.
• When the contract for purchase of the property was presented, the amounts written in by the Realtor or mortgage professional were estimates. The settlement statement contains the actual fees associated with the loan, including lender fees, escrow amounts for taxes and insurance, recording fees, real estate commissions and the amount the seller will receive.
• The buyer will be informed to arrive at the closing with certified funds for the determined amount in order to close. This amount will be less the deposits, if any, that have been given in order to secure the property.
• Once all of the documents have been signed, the property is transferred to the buyer. The buyer may now move in on the date agreed upon between the buyer and seller as recorded in the sales contract.