Closing

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This is the process that happens (on closing day) when you buy (or sell) property. It is when you legally "close" the transaction, and the property becomes yours (if you are buying). You and your representatives (e.g., real estate agent or attorney) meet with the seller and her representatives, make sure everything is in order, confirm that any outstanding contingencies have been taken care of, sign the many documents, make any required payments, and then receive the keys to the property. Where the closing takes place can depend on which state you are in; it can be at a lawyer's office or at the office of the title company. It is usually a more challenging day for the buyer, who will commit himself to a loan for the mortgage, as well as have to pay for various items related to the whole closing process. The seller, on the other hand, sometimes doesn't even have to attend the closing. The fact that there are so many documents to be signed at the closing, many of which seem to have a cost attached to them, has made the closing process a subject for much debate. The buyer is supposed to get from the lender a "good-faith estimate" of all these costs before the closing takes place, but because it's only an estimate and because some costs will be beyond the control of the lender, there can still be surprises. Most of these "closing costs" will be paid by the buyer, and some can be handled before the closing: appraisal fee, credit report fee, escrow account fee, flood certification, loan origination fee, recording fees, title insurance, and transfer taxes. When the final costs have been determined, the buyer and seller will receive a closing statement. A closing also usually takes place following a mortgage refinancing [see refinancing (mortgage)], however these closings are less complicated than when property actually changes hands.