Did you ever wonder what happens at closing in a real estate deal? Many think of it as a time where a bunch of documents are signed. What does the signing of the documents actually accomplish?
Officially, a closing is the culmination of the entire real estate transaction and here is what happens:
- Documents that tranfer the ownerhsip of the property from one party to another (conveyance) and other required instruments are signed and delivered
- A monetary accounting is conducted between the parties based upon the Real Estate Settlement and Procedures Act (RESPA)
- Parties determine if condition of title is acceptable
- Funds are deposited with title company
- Money, in the form of checks is given to the Seller, Listing Agent, Selling Agent and on occasion the buyer, the buyer/seller attorney (referrred to as disbursements) per the HUD-1 by the Title company (escrowee) as directed by parties
- Ownership of the property is transferred
- After closing, the documents of conveyance are sent to the county recorder’s office for recording by the Title company
Below is a chart that shows the common costs in a real estate transaction along with who is typically responsible for paying them. The chart was provided by First American Title.