What Happens During a Real Estate Closing?

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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

Closing cost chart
Sari Levy

Sari Levy is Managing Broker of Lucid Realty.

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