What Happens in "The Closing"?

The "Closing" is one of the final steps in the process of buying, selling, or refinancing a home. It is when all parties involved meet to finalize the transaction. The closing can only take place once all the conditions of the real estate contract and the lender's requirements have been met.

The closing can take place at the realtor's office, lender's office, buyer's or seller's home, or attorney's office, but it is most often conducted at the title company's office. The title company coordinates who should be there and the time of the closing. Sometimes during a purchase, both parties may not be able to be present at the same time in a closing. In this case, the seller can sign all of his/her documents at a different time than the buyer.

What to Expect at "The Closing"

When you arrive at the closing, you will be asked for your government issued photo ID to verify identification and so that a photocopy of it can be made. You will then be directed to a "closing room" where the closing officer/settlement agent will explain each document to you, including a breakdown of all closing costs shown on the HUD-1 Settlement Statement. The HUD-1 Settlement Statement will also set forth the net proceeds amount due to the seller and the amount of funds needed to close by the buyer. You should never sign a document that you do not understand. Don't hesitate to ask the closer to describe what a document means if you did not understand the first time. They are used to explaining documents over and over again, so you shouldn't feel embarrassed to ask for further explanation.

During the closing, you will also receive paper copies of important documents for your records as well as a CD-Rom that will include all loan documents used in your transaction.

Once all the documents are signed, funding can take place. It the transaction is a purchase, the funding will take place either that same day or the next day. However, if the transaction is a refinance, it is usually subject to a three-day recission period which will put off funding until that time has passed. Once all funding has been received and the title agent has updated and recorded the required documents with the county recorder, your transaction is complete! All funds can then be disbursed and, in the case of a purchase, the buyer can receive his/her keys to the property.

Documents signed at the closing may include (but not be limited to) the following: