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What happens at Closing / Settlement?

By
Real Estate Broker/Owner with DROdio Real Estate, Inc

Closing (also referred to as “settlement”) is a mysterious thing for most buyers & sellers, especially if they’ve never been through the process before. Here’s a little primer:

The settlement company is an independent 3rd party that coordinates everything for settlement. They are the “quarterback” in the process. They do many things behind the scenes, including a title search, to make sure you’re getting a “clean” title (i.e., there aren’t any claims on the title. A claim would be, for example, someone disputing that the title indeed belongs to the person whose name it’s in). The settlement company also gets all the loan documents from your lender and they put the paperwork together to be signed by you. The settlement agent also creates the HUD-1 document, which is a document that details all of the monies in the transaction.

At settlement, you’ll usually sit in a conference room with the other party. A settlement agent will review the HUD-1 with both parties and will ensure it’s correct. Then, the buyers will sign their loan documents, the seller will sign the property over to the buyers, and the sellers will give the buyers their keys.

Lastly, the settlement agent will collect funds from one party, and disburse funds to the other party. If you have to bring money to the settlement table, it must be in the form of a certified or cashier’s check. And if you are receiving proceeds from the transaction, the settlement company will either wire it to you, or cut you a check.

The settlement process usually takes about a half hour for the seller, and an hour to an hour and a half for the buyer (they have all the loan documents to sign!)

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