What Is A Closing?

In its simplest sense, the closing is the moment when you pay the seller and become the owner of your new home.

But, as your Realtor ® will tell you, the sale of a home is a more complex transaction than the sale of a car or other big ticket item. The closing is a kind of ceremony intended to bring the pieces of the transaction together.

Even if the home is brand new, for example, the land itself has been owned and transferred for generations. An undetected mistake made by a file clerk thirty years ago could lead to an unpleasant and expensive surprise for you or your lender.

Before handing over the money to the sellers, both you and your lender want to be reassured there won't be any such surprises. You also want to ensure that the sellers really have the legal right to sell the property. And before handing over title to the property, the sellers want to be reassured that your check is good.

The closing is when everyone gets reassured, the paperwork gets signed, the money changes hands, and you become the proud new owner.

A closing usually has three parts. In the first part, you review and sign all the loan documents. This usually takes about twenty to thirty minutes.

In the second part, you, the sellers and the title company exchange and sign the documents about the transfer of ownership, and about aspects of your contract such as termite inspection, and prorating the taxes. This part may take about tweny minutes.

In the third part, the money changes hands and you become the new owner. All together, the closing can usually be completed within an hour.

Each transaction can have its own minor variations, of course. Your Realtor ® can tell you more about the details of a closing and will usually accompany you to the closing itself. The important thing is that, after the closing is finished, you'll be able to walk through the doors of your very own home.