Residential Real Estate:
The closing refers to the final meeting between the buyer and the seller of a particular piece of real estate, at which time any remaining documents related to the sale are signed and finalized. The deed to the house is transferred from the seller to the buyer, title insurance is paid, the buyer signs the mortgage papers, and transfer taxes, if applicable, are paid to the state. The buyer will also pay the seller for any other expenses, such as furnishings or appliances that have already been agreed on.
Several things happen during a closing:
- The buyer (or his bank) delivers a cheque (generally in the US, a Cashier's check or wire transfer) for the balance owed on the purchase price.
- The seller signs the deed over to the buyer, and gives him the keys.
- A title company, lawyer or civil law notary registers the new deed with the local land registry office.
- The seller receives a cheque for the proceeds of the sale, less closing costs and mortgage payouts.
Closing in escrow usually occurs in the western half of the United States. A title company or other trusted party holds the money and the signed deed, and arranges for the transfer. This happens so that the seller can give up ownership of the property, and the buyer can hand over the payment, without both parties having to be present at the same time. Escrow ensures an efficient transaction, or if something goes wrong, an efficient termination of the agreement.
On the Eastern side of the US, settlement (as closing is called) takes place on a specified date and time during which all parties, usually including the agents involved, meet at a settlement company presided over or supervised by a lawyer. The transfer of money (in form of certified or wired funds) and the property takes place, and the deed is then recorded by the company.