Closing (real estate)
Posted on:3/30/2006
| Closing is 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 transferred to the buyer. In most jurisdictions ownership is officially transferred when the contract 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 located.
Several things happen during closing:
1) The buyer (or their bank) delivers a cheque for the purchase price.
2) The seller signs the deed over to the buyer, and gives them the keys.
3) A lawyer or civil law notary registers the new deed with the local land registry office.
4) The seller receives a cheque for the proceeds of the sale, less closing costs and mortgage payouts.
Closing typically happens in escrow, which means that a lawyer, real estate broker 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.
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