A. Whether you refer to it as a Settlement and closing, this is the final step of your real estate transaction. In Maryland, this is the day that you will receive the keys to your new home, and you will officially become its new steward until you sell it!
The closing is handled by a third party, either a title company or an attorney (if you go the attorney route, you want to make sure that they are experienced in real estate transactions). At a closing, major events include:
- Buyer will wire their cash to close and the lender will wire the amount being loaned to the buyer to the title company.
- A home’s title (and the keys) are transferred from seller to buyer.
- The proceeds of the sale are distributed to the seller.
- Agent commissions are disbursed.
Closings involve signing a lot of paperwork, including the deed, which grants legal rights given to the buyer. The deed will then be registered with the city or county to protect the ownership rights of the new owner. Keys are also given from the seller to the buyer. If a loan was taken, buyer’s will also sign a promissory note agreeing to pay the bank back for the loan.
As a buyer or seller, it’s important to review the settlement statement before closing. The Settlement Statement shows line-by-line each and every expense, as well as who is responsible for paying each amount. You should get this document a minimum of one day prior to closing, but hopefully several days before, It is strongly recommended that buyers wire their funds no later than 24 hours prior to settlement. If a final settlement statement is not available, your lender will have provided you with an estimated cash to close amount which will be close to what is required. Any overage, will be refunded at settlement. I always recommend bringing a check with you in case the estimated amount is lower. The latter rarely happens. Lenders have a tendency to over-estimate as a result of penalties that will be levied for significant underestimations.