Real Estate Investing Information Blog

Closing (or settlement as it known in several parts of the US) is the last step in executing a real estate transaction.

The closing date is set during the negotiation phase, and is typically several weeks after the offer is formally accepted. On the closing date, the parties complete the purchase contract, and ownership of the property is transferred to the buyer. In the majority jurisdictions ownership is officially transferred when the agreement is registered at the cadastre, or, in most US states, at the office of the County Recorder of the county in which the property is situated.

Several things occur during closing:

Closing in escrow typically occurs in the western half of the US states. A title company or additional trusted party holds the money and the signed deed, and arranges for the transfer. This is mainly so that the seller can give up ownership of the property, and the buyer can hand over the payment, without together parties having to be present at the same time. Escrow ensures an arranged transaction, or if amazing goes wrong, an orderly termination of the agreement.

On the Eastern side of the US, resolution (as closing is called) takes place on a specified date and time during which all parties (usually including the agents involved) convene 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 action is then recorded by the company.