Closing is the final step in executing a real estate transaction.
The closing date is set during the negotiation phase, and is usually several weeks after the offer is formally accepted. On the closing date, the ownership of the property is transferred to the buyer. Ownership is officially transferred when the deed from the seller is delivered to the buyer.
Several things happen during closing:
- The buyer and/or lender delivers a check (generally a cashier’s check or a wire transfer) for the balance owed on the purchase price.
- The seller signs the deed with a notary over to the buyer and gives it to the buyer.
- Commonly, the seller delivers possession to the buyer, typically by giving the buyer keys to the home. Unless otherwise specified in the real estate contract (such as a Buyer’s Temporary Lease), delivery of possession should be at the closing.
- A title company registers the new deed with the recorder’s office. Conveyancing taxes and recorder’s fee will typically have to be paid, which are part of the closing costs.
- The seller receives a check or bank transfer for the proceeds of the sale, less closing costs and mortgage payouts.
- From the funds allotted for closing costs, prepayments for real estate taxes and insurance may be required, and fees charged by other parties may be paid, such as real estate brokers/agents and the title company.