What Does “Settlement” Mean In Real Estate?
So you have finally reached the end of the long and tedious process of buying or selling a home. Now everyone is talking about the closing day, which is also known as the settlement. Most people refer to this process as closing instead of the settlement.
What is a settlement? The settlement is the final stage in the home transaction. This is when the ownership of the property will be transferred from the seller to the buyer. The funds will be distributed in the form of a check to the sellers, the real estate agents that were involved in the sale will receive a check for the commissions that they earned, and the buyer will need to have a cashier’s check in the amount of the closing costs if he or she has not already wired the money to the title company.
When the settlement process begins, there is a large amount of paperwork involved. The escrow company will have the documents ready; they will just need to be signed. Buyers will sign their names anywhere from 10 to 30 times during this process.
There are many important things that happen on the day of the settlement. The buyer will need to supply a check for the total amount owed for the purchase price of the home. The deed will be signed over from the seller to the buyer. Once this is signed, the ownership is transferred from the seller to the buyer, and the buyer will also receive the keys to the home. The title company will file the new deed with the government, showing the buyer as the new homeowner. Finally, the seller will receive any leftover funds that were available once the closing costs are paid and the balance of the mortgage loan is paid off.
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