In a real estate transaction, what does "closing" refer to?

"Closing" in a real estate transaction specifically refers to the final transfer of ownership from the seller to the buyer. This event marks the culmination of all prior negotiations, agreements, and procedures that have taken place during the transaction.

At closing, several important activities occur. Both parties finalize all necessary paperwork, which typically includes the deed, mortgage documents, and any other required disclosures. The buyer pays the agreed-upon purchase price, often with funding from a lender if financing is involved. Additionally, any closing costs, such as taxes, insurance, and fees to real estate professionals, are settled. Once all documents are signed and payments are made, the property officially changes hands, and the buyer receives the keys, thus becoming the new legal owner.

This understanding reinforces the critical nature of closing in the real estate process, distinguishing it from earlier stages such as negotiations or inspections, which are preparatory steps leading up to this final, pivotal moment of ownership transfer.