Jan. 10, 2007 - What is a Real Estate "Closing"?

A 'real estate closing" is the meeting of the buyer, seller, and their agents (optional), and representatives from the lending institution and Title Company wherein the actual transfer of title to the property occurs.  The purchase agreement or contract that has been signed describes the property, states the purchase price and terms, sets forth the method of payment, and usually names the date and place where the closing or actual transfer of the property title and keys will occur.  Here in Texas we typically do that in one room all together.  I have lived in several states and can tell you that each state is different.  Occasionally it doesn't work for the buyer and seller to be there at the same time and they will sign the papers at different times.  If the buyer or seller is in another state the title company can do a mail out where they sign the papers in front of a notary republic.  Regardless of how it is done all parties must sign in front of a notary.

The title company transferring ownership of the property will prepare a new deed.  The lender will require the new buyer to sign a promissory note.  In Texas we use a "Deed of Trust' instead of a traditional mortgage.  A deed of trust is not a deed it is a mortgage.  The buyer sings the deed of trust as security to the lender for the loan.  The mortgage or deed of trust gives the lender the right to sell the property if the buyer fails to make the payments.  Basically no pay, no stay.  Before you exchange the papers the property may be surveyed, appraised, inspected and the ownership of title checked in county and court records.