What does "closing" refer to in a real estate transaction?

"Closing" in a real estate transaction refers to the final step where ownership of the property is officially transferred from the seller to the buyer. This involves several important actions: the disbursement of funds, typically where the buyer pays the purchase price, and the signing of necessary documents, which legally formalize the transfer of property. During closing, both parties will finalize all contractual obligations, settle any outstanding costs, and ensure that the title of the property is clear.

This process encapsulates the culmination of the real estate transaction and is crucial because it marks the moment when the buyer becomes the legal owner of the property. It is a pivotal point in real estate practice, as it carries legal implications and is often when the keys to the property are handed over to the new owner, allowing for possession of the property to be taken immediately after closing.