The Closing is the final stage in a real estate transaction. When a house or condominium unit is being sold or transferred, the Closing occurs when the seller transfers ownership (title) of the property to the purchaser. It is evidenced by a document known as a deed. There are several types of deeds, but the most common are bargain and sale deed, quitclaim deed, and executor’s deed. When a cooperative interest is being sold or transferred, since it is a type of corporate ownership of a residential building, the Closing is when the seller transfers the shares to the purchaser. It is evidenced by a stock certificate. A proprietary lease is also signed by the purchaser and the cooperative corporation, allowing the purchaser to occupy the unit associated with the shares being transferred. The proprietary lease creates a landlord-tenant relationship. If a loan is used by the purchaser, loan documents are also signed at the time of the Closing.
Assuming all title issues, if any, have been resolved, mortgage financing has been approved where necessary, and board approval has been obtained where required, a Closing will be scheduled. Within a day or two before attending the Closing, a final walk through is commonly scheduled by the purchaser to make sure there have been no significant changes to the property’s condition. Occasionally an issue will arise at that time and should be addressed prior to Closing to avoid any delays. If the property has a water meter, the seller should schedule a final reading to take place before the Closing to make proper financial adjustments.
The Closing is typically attended by the seller, purchaser, their respective attorneys, the title closer, the bank attorney (if the purchaser has obtained financing) and the real estate agents, if any. The attorneys make financial adjustments for utilities and taxes and go over the documents with their clients. The funds are remitted to the seller or on the seller’s behalf, and all necessary documents are signed by the parties.
The title closer makes sure that mortgages, judgments or liens shown in the title report are paid off and that any new mortgage or deed will be recorded. The title company insures the purchaser as to its ownership and, if there is a mortgage, it insures the lender that their mortgage has priority over other liens. Commissions, fees and expenses are paid and the keys to the home are provided to the purchaser, concluding the transaction. Occasionally, the seller is allowed to remain in the property after closing subject to a terms agreed to by the parties and contained within a post-closing occupancy agreement.