What happens at settlement or closing?

Although settlement or closing details vary from area to area, three basic steps are always taken. You, as the seller, prove you have marketable title, the buyer pays for the property and you give the buyer a deed or bill of sale. Settlement or closing usually takes place in less than an hour.

Specifically, you sign the settlement or closing papers and the deed. Your buyer signs the settlement or closing papers and mortgage note.

All payments by you and your buyer are detailed on standard federal settlement or closing forms. You pay for your settlement or closing costs and your buyer pays whatever is owed on the down payment plus the buyer's closing costs.

You receive, either now or shortly after settlement or closing, any money kept in escrow for taxes and insurance and unused prepaid items, such as insurance. Disbursement of funds may be at settlement or closing or within 7-10 working days, depending on local custom.

When all papers are signed and checks have changed hands, you hand the buyer your keys. Your home is sold and the transaction officially settled when the papers are recorded.