Demystifying The Closing Process

The closing table can seem mysterious, with stacks of documents and multiple parties involved. SETCO takes you on a step-by-step journey through what happens during the closing process. From signing documents to disbursing funds, we shed light on each essential phase of the closing. 

1. Scheduling and Location: Closing day usually occurs at a predetermined location, often at a title company’s office, an attorney’s office, or a real estate agent’s office. The date and time are scheduled and agreed upon by all parties involved. 
2. Participants: Closing involves several key participants, including the buyer, the seller, their respective real estate agents, a representative from the title company or closing attorney, and a lender’s representative in some cases.
3. Review of Documents: At the closing, all parties gather to review and sign various legal documents. These documents may include the purchase agreement, the loan documents, the settlement statement (also known as the Closing Disclosure or HUD-1), and any required disclosures. It’s essential to review each document for accuracy and completeness carefully. 
4. Payment of Closing Costs: The buyer is typically responsible for paying any remaining closing costs, including the down payment, closing fees, and other expenses. These costs are often paid by a cashier’s check or wire transfer, so having those funds ready in advance is essential. 
5. Signing the Mortgage Documents: You’ll sign all the required loan documents if you finance the purchase with a mortgage. These documents outline the terms of your loan, including the interest rate, repayment schedule, and any applicable fees. 
6. Title Insurance: At the closing, you’ll purchase title insurance. This insurance protects you from unforeseen property title issues, such as liens, claims, or discrepancies. The title company or attorney will explain your policy and provide the necessary paperwork. 
7. Seller’s Obligations: The seller will sign documents transferring ownership of the property to the buyer. This includes the deed and any other required documents. Once these documents are signed and notarized, ownership legally transfers to the buyer. 
8. Distribution of Funds: The closing agent or attorney will distribute funds as necessary. This includes paying the seller the proceeds from the sale, paying off the seller’s mortgage (if applicable), and covering any other outstanding financial obligations. 
9. Recording the Deed: After all, documents are signed and the funds are distributed, the closing agent or attorney will ensure that the deed is recorded with the appropriate government office. This recording officially documents the change in ownership. 
10. Receiving the Keys: Once all the paperwork is signed and ownership has been transferred, the buyer is given the keys to their new property. It’s the moment they’ve been waiting for, and the property is officially theirs. 
11. Closing Statements: At the end of the closing, all parties involved receive a closing or settlement statement. This provides a detailed breakdown of the financial transactions and a summary of the costs and funds exchanged.
12. Celebration: With keys in hand and all the documents signed, it’s time to celebrate. The closing day marks the successful conclusion of your real estate transaction, and it’s a moment worth commemorating. 

Remember that the specifics of your closing may vary based on local customs, state laws, and the nature of your transaction. Working closely with your real estate agent, lender, and closing agent or attorney is essential to ensure a smooth and successful closing process.