Closing On The Property

Closing is the process that occurs when the property is finally transferred from the seller to the buyer. Learn more about real estate closing in this section. 

During the process of closing – also called settlement or escrow – the closing agent takes money from buyers for a property while paying out to the owners. The purchaser’s title is also recorded with local records, including any mortgage liens that may be present on the home being sold. All paperwork has been prepared by closing agents, lenders, lawyers, and title companies. The paperwork of the sales agreement ensures everyone’s interests are properly reflected. Buyers receive the title to the property, the lenders’ loans are recorded in the public record, and the state government collects the transfer taxes.

Finally, the closing agent inspects the sale agreement to determine what payments and credits the owner is owed, as well as any amounts the buyer should pay. The closing agent also ensures that any other transaction costs are paid, including taxes and title searches.

Closing is the time when “adjustments” are also made. For example, if you – the seller – have pre-paid four months of taxes in advance. In this case, the closing agent will compensate you for your prepayment by ensuring the buyer pays you the additional money at closing.

This could also work in reverse. If you – the seller – have unpaid taxes, then the closing agent will reduce the money you are paid by the same amount as the taxes you owe.