What is a “Closing”?
Real estate closing is the transfer of the real estate title from seller to buyer according to the sales contract. In a closing, the buyer receives the title to the real estate and the seller receives the money.
There are numerous requirements and costs associated with closing. It is considerably more complex than buying something at a store.
Both requirements and costs result from the sales contract itself, from tradition and local custom, and from local, state, and federal laws. Most real estate closings use the services of an escrow agent, who serves as a third party that both the buyer and the seller can trust and who coordinates the activities between buyer and seller according to the sale and purchase agreement.
The duration of the steps necessary to close a real estate transaction is known as escrow. Closing costs range from 3% to 6% of the mortgage; equaling $9,000 to $18,000 on a $300,000 loan.
At closing:
the money for the property is paid, the buyer signs the closing documents and releases the money;
the seller signs the deed legally transferring the property to the buyer;
the buyer receives title insurance guaranteeing the validity of the title on the property;
the seller usually signs the deed in front of a notary public, who verifies that the signature is by the person so designated. The buyer’s name is also on the deed, but the buyer does not have to sign the document.
The final step in closing is recording the deed. Although the procedure varies somewhat throughout the country, there is generally a recorder of deeds in the county courthouse.
In most areas the recording of documents and their retrieval is performed electronically, which expedites recording and retrieving deeds. After everything is signed, the deed will be recorded in the county recorder’s office, along with the mortgage or the deed of trust document.
If you have any questions about your current or future real estate transaction, call our team of attorneys at the Kendrick Law Group and Champion Title & Closing to learn more or to obtain one of our customized closing guides.
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