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The closing date is set during the negotiation phase, and is usually several weeks after the offer is formally accepted. On the closing date, the ownership of the property is transferred to the buyer. In most jurisdictions, ownership is officially transferred when a deed from the seller is delivered to the buyer. Lenders providing a mortgage loan will often require title service, including title search and title insurance, appraisal, land survey, and attorneys to be involved.
Several things happen during closing:
In some states, closing in escrow may occur. In this process, a title company or other trusted party holds the money and the signed deed, and arranges for the transfer. This is primarily so that the seller can give up ownership of the property, and the buyer can hand over the payment, without both parties having to be present at the closing at the same time. Escrow ensures an orderly transaction, or if something goes wrong, an orderly termination of the agreement.
In other states, a process called settlement takes place on a specified date and time during which all parties (usually including the agents involved) meet at a settlement company, and which is presided over or supervised by a lawyer or settlement agent. At that time, the settlement agent disburses all funds listed on the settlement statement (in form of certified or wired funds) and the property exchange takes place, and the deed is then recorded by the settlement company.