A real estate closing is the final execution and exchange of documents to complete the buying and selling of real estate, whether commercial or residential. The real estate closing is like a well-oiled machine: many different, individual parts come together for a seamless function, but if one part of the machine is slightly off, it will not run correctly. When one part of the closing is off, the entire transaction may be delayed until the issue can be resolved and the closing rescheduled.
What Happens before the Closing?
Prior to the closing, all legal documentation for the transaction will be drafted and agreed to. The parties involved in the preparation are:
- The buyer and seller and their respective agents and attorneys
- The lender
- The title company
- The title insurance company
- The escrow company or closing attorney
While the lender’s role is well known – providing the debt to buy the property – few know the role of the title company, the title insurance company, and the escrow company (or closing attorney). The title company reviews the deeds and legal history of the property to ensure that it is available for sale by the seller and does not have any encumbrances. The title insurance company then offers an insurance policy to the buyer based on the title company’s opinion. The title insurance protects the buyer from any unknown defects in the title, such as a previously unknown, but valid, legal claim (e.g., easement, claim of ownership, restrictive covenant). The escrow company or closing attorney will receive funds from the lender or buyer to hold until the closing.
Who Will Be at the Closing?
The people who attend the real estate closing will transaction-specific, but those most likely to attend are:
- Your real estate agent
- Buyer’s attorney
- Seller’s attorney
- Representative from the lender
- Representative from the title company
- Representative from the title insurance company
- Representative from the escrow company or the closing attorney
You’ll note that the buyer and seller aren’t listed. While the buyer and seller are generally welcomed to attend the closing, their presence is not required.
What Happens at the Closing?
As noted, the closing is the final execution and exchange of documents between the relevant parties. This is the last chance to ask questions and clarify or rectify any issues. Once all parties are content with the documents and the deal, the necessary legal documents will be executed and notarized. Upon execution of the documents, the escrow company or closing agent will release the funds to the seller. The buyer will take the keys to the property following closing. Once the closing is complete, the seller no longer owns the property and the buyer has now acquired the property.
Real Estate Lawyer in Rhode Island, Massachusetts, and Connecticut
At Palumbo Law, we have helped thousands of homeowners, investors, and businesses with real estate closings. Whether you’re buying your first home or acquiring a commercial property, our attorneys have the experience and skillset to ensure that your transaction closes on time. If you are considering buying or selling property, please contact our office to set up a consultation or complete the contact form.