What Happens at a Real Estate Closing?

A real estate closing — also called settlement — is the final step in a property purchase or sale, where ownership of the property officially transfers from seller to buyer. At closing, legal documents are executed, funds are disbursed, and the deed is recorded. The entire transaction culminates in this meeting.

Who Attends a Closing

Closings typically involve the buyer, the seller, real estate agents for each party, a closing attorney or title agent, and sometimes lender representatives. In some states, attorneys are required at closing — in others, a title company handles the process. Remote and virtual closings have become increasingly common.

What Happens Before Closing

In the days before closing, the buyer should receive a Closing Disclosure — a standardized document showing the final loan terms, all fees, and the exact amount needed to close. Review this carefully and compare it to the Loan Estimate received at the start of the transaction. Significant changes require explanation.

A final walkthrough of the property typically occurs 24-48 hours before closing to confirm the property is in the agreed condition and any required repairs have been completed.

Documents Signed at Closing

Buyers signing a mortgage will typically execute: a promissory note — the promise to repay the loan, the mortgage or deed of trust — the lien on the property securing the loan, the closing disclosure, and various lender-required disclosures and acknowledgments.

The deed — the document transferring ownership from seller to buyer — is signed by the seller and delivered to the buyer at closing.

Both parties may execute an ALTA settlement statement showing all credits, debits, fees, and the final cash to close.

Funds Exchanged at Closing

The buyer brings certified funds — cashier's check or wire transfer — for the down payment and closing costs. The lender wires the loan proceeds. From these combined funds, the closing agent pays off the seller's existing mortgage, pays all closing costs and fees, and distributes the remaining net proceeds to the seller.

What Can Go Wrong at Closing

Title issues discovered at the last minute, loan funding delays, last-minute changes to the closing disclosure, property damage discovered in the final walkthrough, and disputes over personal property remaining in the home are the most common problems that delay or derail closings.