Closing (real estate) Definition
The final step in executing a real estate transaction.
The closing date is set during the negotiation phase, and is usually several weeks after the offer is formally accepted. On the closing date, the parties consummate the purchase contract, and ownership of the property is officially transferred to the buyer.
Several things happen during closing:
- The buyer (or their bank) delivers the check for the purchase price.
- The seller signs the deed over to the buyer, and gives them the keys.
- The lawyer registers the new deed with the local land registry office.
- The seller receives a check for the proceeds of the sale, less closing costs and mortgage payouts.
Closing typically happens in escrow, which means that a lawyer or other trusted party gets the money and the signed deed, and arranges for the transfer. This is primarily 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 there at the same time. Escrow ensures an orderly transaction, or if something goes wrong, an orderly termination of the agreement.