Closing day (AKA settlement) is the day on which the property legally changes hands.

What is a real estate closing?

The certificate, title deed and abstract will be prepared in advance by the title company or attorney handling the closing.

At closing, the contract will be signed by both parties, all funds will be distributed, the deed will be signed by the seller, any remaining closing costs will be finalized and the buyer will take possession of the keys to the home.

How Closing Works

The title company (or attorney) will guide the buyer and seller through the entire process. In addition to the the previously listed items, a typical closing will usually include handling: the the payoff of any existing loans, release of all liens, termite report, surveys, proof of homeowner’s insurance as well as other documents.

Forms You Will See at Closing

You will typically sign a HUD-1 settlement statement or a Closing Disclosure, a warranty-deed as well as the bill of sale. The buyer will also sign documents including the HUD-1 or Closing Disclosure, the warranty deed, and a Truth in Lending Statement. Depending on local laws and regulations, several other documents will also be signed at the time of the closing on a home.

Click here to learn more about how to read a HUD-1.

Some Things to Bring With You to Closing

Whether you are the buyer or the seller, when you go to closing, you will need to bring your ID (usually a state-issued picture ID such as your driver’s license) and your social security card.

If you are the buyer you will need the funds to cover the purchase price and all related expenses. Check with the title company to see how they prefer to handle closing costs.

They may require a cashiers check, but more often they require a wire transfer. You should know the amounts before closing day and it might be a good idea to prepare a small cushion of additional funds to cover any unexpected charges.

You should also find out if you need to make the transfer a few days prior to closing. This is especially true if your closing date is early in the morning.

If you are the seller, you need to bring any keys to the house (and mailboxes or garage door openers–if necessary). You will need to provide proof that you have paid the tax bill, the utilities, homeowner associations as well as any receipts for repairs and inspections that were done.

You will also want to make a list of any other information that you want to pass along to the buyer.

After the paperwork has been signed, money has traded hands and the keys have been handed over, your closing has successfully closed.

How much are closing costs?

Whether you are the buyer or the seller, you can use the link below to help you calculate closing costs and other costs related with the transaction. We don’t have a title company preference, but found that this calculator is the most comprehensive:

Closing Cost Calculator (Buyers and Sellers)