The time leading up to your closing day is going to be busy. You’ll be cleaning, packing, contacting movers, and a million other little details. A real estate closing can be a puzzling process for both home buyers and sellers. Here is a quick breakdown of the closing process to help clear up the confusion.
What is a Real Estate Closing?
A real estate closing is also called a settlement. The two terms are interchangeable, but “closing” is what is commonly used. This is the final step in a real estate purchase and it’s also when property ownership is transferred from the seller to the buyer.
What Happens on the Big Day?
There is a lot of paperwork that goes along with the closing process. The escrow company will have most of the documents ready to go – they will just need to be signed. If you’re the one selling your home, there is less paperwork involved than there is for the homebuyer. A buyer may sign their name anywhere from ten to thirty times during the closing process. You’ll have to sign mortgage documents, tax records, legal disclosures, and more.
Here are some specific things that happen on closing day:
- The buyer or the buyer’s lender will provide a check written out for the amount owed as the purchase price of the house.
- The seller afterward signs the deed to the buyer. This acts as the official transfer of ownership to the buyer. This is also when the seller turns over the keys to the buyer.
- The title company will register the new deed with the appropriate government office. This will show on the record the buyer as the new homeowner.
- The seller will receive any proceeds they earned from the sale, once their mortgage balance and closing costs have been paid off.
In summary, during closing, ownership of a property is transferred from the seller to the buyer. All funds are distributed by the escrow company, and the new deed is registered in the buyer’s name. The buyer also has to bring a check for all of the mortgage and title fees accumulated along the way. There is a lot that leads up to this point and you will definitely want an experienced realtor on your side to help you through the process. To get in contact with one today click here. You can also take a look at our FREE home buyer’s handbook here.