Real Estate Closing

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Title Insurance and Closings

Real estate transactions involve a substantial amount of documentation and paperwork, including a lengthy list of documents that must be signed by one or both parties. Once the attorneys and real estate professionals have ensured all inspections and other due diligence have been completed, it is customary to schedule a time where the parties can meet and execute all the required documents to transfer ownership. This is called the “closing.”

While most closings are conducted with both parties (and their representatives) present at the same time, there is no legal requirement that this occur. Frequently, the parties meet at the office of a real estate professional, such as an agent, broker, or a title officer. Often, the party handling the closing will shuttle the parties in and out of a conference room, obtaining all required signatures from each party separately. If a party cannot be present, that party may appoint a representative to act as Power of Attorney and sign on their behalf. You may also mail in documents for the closing as long as the documents are signed in the presence of a notary; in some cases, you may be able to complete the transaction electronically. Once the documents are signed, the deed must be recorded to demonstrate property ownership, although the transfer of ownership is valid between the parties before the deed is recorded.

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What Documents are Typically Part of a Closing?

Closing documents include key terms and provisions that address the accepted purchase offer, home inspection details, and loan origination information. You can expect to be asked to review and sign the following documents at a closing:

  • The deed of conveyance—This document legally transfers ownership of real property. The common types of deeds are warranty deeds, grant deeds, and quitclaim deeds.
  • The bill of sale—This document identifies what is being transferred (e.g. any personal property included in the sale of the home, such as appliances or furniture), as well as the amount being paid.
  • Any transfer tax declarations—Most municipalities charge a real property transfer tax on the sale of real estate.
  • An affidavit of title—This document warrants that the seller has clear title, or describes any known defects in the title.
  • Title insurance—Title insurance insures against financial loss caused by defects in title to real estate.
  • Loan documents—If you need a loan to finance your real estate purchase, you will typically sign additional documents showing how much money you are borrowing (the note) and agreeing to use the property you purchase as collateral for the loan (the mortgage).

As part of a closing, the closing agent will customarily prepare a closing statement. This document outlines how all expenses will be allocated as a part of the sale, including closing costs, taxes, interest points and other amounts.

Last updated December 28, 2018

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