What Is "Closing"?
“Closing" is the point in time at which the title to the property is transferred from the seller to the buyer and, unless the sale was for cash, a mortgage is given by the buyer/borrower to the lender.
Before you submit a contract to purchase a home, you must obtain some information about the cost associated with closing. A wise seller won’t look at your offer without proof that you have cash in the bank, or you’ve verified with a lender that you can afford the price you are offering. If you are obtaining a loan to purchase the property, your lender has three days from the time of the loan application to provide you with a Good Faith Estimate of your loan costs. This document protects you from surprises about cost.
Since the countdown to closing begins once the seller accepts the sales contract, selecting a settlement agent to prepare the documents for your closing is key to making the process a success. Ask your agent for a recommendation for this process, usually a title company. Once a settlement agent has been selected, he or she will handle the closing process from there. If you have given the seller and earnest money deposit, the settlement agent will see that it is credited to you at the time of closing.
Next, the settlement agent will need preliminary title work. A title professional will examine the public records regarding your home’s title. This provides any warnings of title flaws that must be dealt with before the property can be exchanged. Title professionals are there for you to make sure all obligations are dealt with and issues resolved before going into closing, if possible.
Finally, the “HUD-1 Settlement Statement” can be prepared by the settlement agent. The “HUD-1” is what outlines all the costs for both the buyer and seller associated with closing. On closing day, the property will be transferred from the seller to the buyer. From there your settlement agent will assist you in signing all the appropriate documents. Once all the signing is complete, the house is yours! Congratulations you are now a Homeowner!
(Copy paraphrased from www.homeclosings101.org)