Settlement vs. Closing in North Carolina Transactions: It is Important to Know the Difference when making plans, whether you are buying or selling a home.
"Settlement" according to the NC Association of REALTORS® Standard Offer to Purchase and Contract is "...the execution and delivery...of all documents necessary to complete the transaction..."
I.e., everyone pops into the closing attorney's office and signs papers, certified funds are received from Buyer or Seller, whichever applies, hands are shaken, and with this step completed, the stage is set for...
"Closing." Recording of the Deed is recognized as the completion of the Transaction with the result of transfer of title, and funds can be disbursed by the closing attorney.
I tell clients that they know they have bought or sold a house when I get paid. It is a little flippant, but quite accurate. The closing attorney can disburse funds only when the deed is recorded.
More importantly, this is when the new Owner can do all the things they have dreamed of, paint, decorate, move into the home, etc. They can enjoy the benefits of ownership.
Over the years, we have gravitated, unfortunately, to the use of the word "Closing" to include the signing of documents. Technically, that has been the "Closing Meeting," which on a good day was followed by "Closing," the completion of the transaction and transfer of title signified by recording the deed. Most times, recording has followed the meeting almost immediately and on the same day, but this has not always been the case, and that is when issues that were not resolved in a timely manner come back to haunt all parties to the transaction.
Our new Offer to Purchase and Contract replaced "Closing Meeting" with "Settlement," to more clearly separate the two events.
It will be up to us as agents to educate our clients, and to create expectations that the Buyers will receive house keys only after recording.
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