"Closing" refers to the meeting where ownership of the
property is legally transferred to the buyer. It is a formal
meeting in which most parties involved in the buying/selling
process will attend. Closing procedures are usually held at
the title company's office or lawyer's office. Your closing
officer coordinates the document signing and the collection
and disbursement of funds. Your agent will be present at
your closing to read the documents on your behalf, answer
any questions, or help to resolve any last minute or
unexpected details that may come up.
In order for the closing to go smoothly, each party involved
should bring the necessary documentation and be prepared
to pay any related fees (closing costs). There may be more
than one form of acceptable payment for your closing costs,
so ask the closing officer which form of payment will be
required and to whom it should be made out. Closing costs
will generally total an amount equal to 2 to 3 percent of the
total loan value, not including down payment and the
buyer's escrow account.
Sellers sometimes pay for a portion or all of the closing
costs, depending on local market conditions, terms of the
purchase contract, and the seller's cash and timing
considerations. Any such concessions should be
acknowledged in writing. Most lenders will allow a credit
from the seller to the buyer for the non-recurring closing
costs. However, they usually won't allow a credit that
reduces the amount of the buyer's down payment or any of
the buyer's recurring costs, such as expenses for fire
insurance premiums, PMI, or property taxes.