What happens at closing in a real estate transaction?

• A. The buyer and seller sign a purchase agreement only.
• B. Closing is the final step where funds are exchanged and title transfers, typically handled by escrow or a title company.
• C. The lender approves the loan and issues the loan commitment.
• D. A home inspection is performed to determine condition.

Answer: (B)

At closing you complete the real estate transaction. The closing agent, usually an escrow or title company, coordinates everything, collects the buyer’s funds, and disburses payments to the seller and to satisfy any existing liens. The title is transferred to the buyer and recorded with the county, typically with title insurance in place to protect the new owner. Prorations for taxes, insurance, and rents are calculated at this time, and the deed, mortgage or deed of trust, promissory note, and the closing statement are signed. The lender’s loan documents and property inspections are completed beforehand, not at closing, making this step the final exchange of money and transfer of ownership.