A closing is the exchange of property ownership against money. It is conducted by a title company, which handles the "money against keys" process and all legal aspects, including recording of the change of ownership. The closing date is contractually agreed upon by both parties, but can be modified as long as both seller and buyer agree. Unless there is an exception, after the closing the buyer has possession of the property and can move in.
Before closing, buyer and seller will receive a closing- or settlement-statement, detailing all amounts to be paid out at closing from the escrow account. Prorated real estate taxes and other fees are also shown here.
Funds transfers, now mostly in form of a wire transfer into the title company's escrow account, and especially international wire transfers should be ordered in time to make sure that the funds arrive punctually, otherwise the closing will have to be postponed, much to the irritation of everyone involved.
Tip: Avoid closing on a Friday – any questions which have to cleared up may cause the closing to be delayed until the following week. Complications ensue – movers are ready to unload etc.
The buyer or seller does not have to be present at closing if his lawyer or agent hold a proper power of attorney. Since COVID-19, closings can also be handled long-distance, and some title companies employ officers which are certified in conducting international closings via video-conference, unheard of pre-COVID.
In some cases, original documents may still have to be mailed to the buyer or seller with specific signing instructions, which have to be observed to ensure the validity of the signed documents.
Not legally required but an absolute must is a walk-through the day of the closing (or the day before) by the buyer and/or his Realtor. The purpose of the walk-through: to ensure A) the property is in the condition agreed upon and B) it is vacated and cleaned as specified.
If the seller did not perform as he should – and this happens more often then you think – the closing can be postponed or funds can be withheld from the seller until everything is in order.
Recording the new ownership with the community or county records will be handled by the title company or buyer's lawyer.
The complete guide, updated frequently, is available in English and in German – get your free copy by sending an email.
Tobias Kaiser works as an independent real estate broker and consultant in Florida since 1990. Always putting his clients' interest first, he specialises in modern Florida homes and architecture, as well as net leased investments.