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House closing, also known as settlement or completion, is the final step in a real estate transaction where the legal transfer of ownership and property rights from the seller to the buyer occurs. During the closing, various documents are signed, funds are exchanged, and all necessary legal and financial obligations are fulfilled to complete the purchase of the property.
The closing typically involves the following key elements:
- Reviewing Documents: Both the buyer and seller review and sign numerous documents, including the purchase agreement, mortgage documents, title documents, and disclosure forms.
- Payment and Funding: The buyer pays the seller the agreed-upon purchase price for the property, usually with the help of a mortgage loan. The lender provides the funds needed for the purchase, and the buyer covers any remaining closing costs.
- Transferring Ownership: The seller transfers the title and ownership of the property to the buyer. This is done through the signing of a deed, which is recorded with the appropriate government agency.
- Distribution of Funds: The closing agent or escrow officer disburses funds to the relevant parties, including the seller, real estate agents, lenders, and other service providers involved in the transaction.
- Title Insurance and Searches: Title insurance is obtained to protect the buyer and lender from any potential legal disputes regarding the title or ownership of the property. Title searches are conducted to ensure there are no liens or encumbrances on the property.
- Settlement Statement: The settlement statement, often called the Closing Disclosure, is provided to both the buyer and seller, detailing all the financial transactions and distribution of funds involved in the closing.
- Final Walkthrough: The buyer typically conducts a final walkthrough of the property to ensure that the condition of the house meets the agreed-upon terms and conditions.
- Closing Costs: Closing costs, which encompass various fees and expenses related to the sale, purchase, and financing of the property, are paid by the buyer and seller during the closing.
- Recording the Transaction: The completed transaction and transfer of ownership are recorded in the public records, making it an official and legally recognized change of property ownership.
Once the closing process is completed successfully, the buyer officially becomes the legal owner of the property and can take possession of the house, typically receiving the keys to their new home. Find your dream house here.