Closing (or settlement as it is known in some parts of the US) represents the final stage when transferring title to real property. The closing date is set forth in the fully executed real estate purchase and sales agreement, and is usually held several weeks subsequent to the contract's effective date.

At closing, the parties will execute a number of different documents, including the deed (a.k.a the instrument of conveyance). The deed is a legal instrument used to convey title to real property from one person to another. Deeds come in various forms. The most commonly used deed is the general warranty deed (a.k.a statutory warranty deed in Florida). With this type of conveyance, the grantor (seller) fully warrants marketable title to the real property and will defend against the lawful claims of all persons whomsoever. See Sec. 689.02, Fla. Stat.

Ownership is officially transferred when the fully executed (and notarized) deed is delivered to the buyer and thereafter recorded in the official records in the office of the County Recorder of the county in which the property is located. The closing will be conducted in a manner consistent with instructions provided by the parties. The real estate purchase and sales agreement and the loan documents will serve as the basis for closing instructions to the closing agent.

Several things happen during closing:

• The buyer(s) and/or lender will deliver funds (generally in the form of a Cashier's check or wire transfer) for the balance owed on the purchase price.
• The seller(s) (grantor) will deliver the executed and notarized deed to the buyer (grantee).
• The instrument of conveyance, together with all other documents needed to perfect the transfer of ownership, will be recorded in the official county records.
• The attorney agent or licensed title insurance agent conducting the closing will issue an owner's and/or lender's policy in favor of both buyer and/or lender.
• The buyer/borrower and seller will pay closing costs, as indicated on the uniform settlement statement (HUD-1), which will be provided and signed by them at closing. See also borrowers closing costs.
• The seller receives proceeds, less closing costs and mortgage payouts.

For every federally related mortgage transaction, a HUD-1 Form must be filed. The HUD-1 Form lists a complete accounting of the purchase transaction.

• Click here to download a copy of the HUD-1 Form (17kb PDF)
• Special Booklet on HUD-1 Form