If you’ve never bought or sold a house before, you may only be somewhat familiar with the term “closing.” You’ll hear people say that they are closing on their house on a specific date or that they’ve got to figure out what their closing costs will be, but those terms in and of themselves aren’t very descriptive. So what exactly is a closing?
The closing is, in the simplest terms, the final transaction that results in you taking ownership of the property from the seller. The seller signs over the title deed to you and provides you with all of the keys and other information needed to fully own the home. Often, the closing of your loan occurs at the same time. That means you’ll be signing all of the final loan documents and that the funds will be disbursed to the seller.
There’s one thing you’ll be doing a lot at the closing: signing and dating. You’ll have a stack of papers to sign and date, so you may be tempted to simply sign away without really looking at the papers. If you have a good realtor, lender, attorney, or other official present, he or she should take the time to explain every piece of paper that’s put before you. You’ll want to pay very close attention to the pages that specify your loan amount. If it looks in any way different than what you expected it to, do not sign the document until you have a very clear understanding of why the numbers aren’t what you thought they would be.
There are two different ways a closing can work. If the seller is in another state or for some reason cannot meet with you in person, your closing may actually take a few weeks as all of the documents are sent around to everyone who needs to sign them. In that case, the final “closing” occurs when the last signature is collected and the documents are filed.
However, in many cases, you’ll actually meet with the seller and a number of other people. The title insurance company often hosts the closing or sends a representative. Your realtor, the other party’s realtor, a representative from the lending institution, or even attorneys may be present. Anyone who has an interest in the sale of the property can be at the closing.
Usually, a closing takes anywhere from an hour to two hours, depending on how many people are there and how many documents need to be signed or explained. However, once it’s finished, you will officially own the property!