First-time buyers eyes get big with a confused look clearly written upon their faces when they hear the word “closing”. The thing is, it is not only first-time homebuyers that get that look. It is also buyers and sellers, whether it is the first home or the 50th home. All they know is that there is a lot of paperwork to sign. It is a confusing process to wrap your mind around, but we are going to make it a little easier to understand for you.
What is a “closing” anyway?
Basically, a closing is the last step in the real estate transaction. The property is transferred from the seller to the buyer. All of the funds within this transaction will be distributed to where they belong. The buyer will pay all the closing costs. The seller will receive their proceeds. Finally, the real estate agent will get his/her commission. The paperwork (tax records, mortgage documents, disclosures, etc.) will all be signed, as well.
The Specifics of Closing Day
There are a few things that happen when you are closing:
The buyer will provide a check to cover the remaining amount left to purchase the house.
The seller will sign over the deed to the buyer and give him/her the keys.
The title company will register a new deed.
The seller will get his/her profit (after the closing costs and mortgage balance is paid in full).
To sum it all up, the property ownership is transferred from the seller to the buyer. The funds are distributed and a new deed is registered to the buyer. The buyer brings a check to cover the mortgage and fees. Once the documents are all signed, the buyer becomes a homeowner. The buyer gets the keys from the seller, and then you are finally done!