The closing is when all parties involved in the buying or selling of a home formalize the sale and transfer rights to the property. While the closing is often filled with excitement and anticipation, it's important to be properly prepared.

The closing will occur on whatever date is agreed upon by both the buyer and seller. An average length of time after signing a Purchase and Sale Agreement for a closing to occur is 30 to 45 days. This allows the lending institution enough time to complete their necessary paperwork, for the assigned closing attorney to collect and prepare his/her documents and for the seller to pack belongings and move comfortably.

Closing may occur within a week of signing the Purchase and Sale Agreement if it is a cash transaction (no mortgage), or may be delayed six months or more if both parties agree. Also, it may be left for future determination with a date “not to exceed” a specific month, day or year.

What can I expect on closing day?

The closing will involve an assembly of you, your broker, the broker for the seller, the seller, and the bank attorney. I would recommend that you hire an attorney to help you decipher the papers that you will be signing. This lawyer will be paid by the buyer and will look out for the buyer’s best interest. The bank attorney can represent you for a fee. Since the bank’s attorney is at the closing to represent the bank’s interest and is therefore impartial between the buyer and the seller, the bank attorney can be hired by the buyer.

You will present your paid homeowner's insurance policy or a binder and receipt showing that the premium has been paid. The closing agent will then list the money you owe the seller (remainder of down payment, prepaid taxes, etc.) and then the money the seller owes you (unpaid taxes and prepaid rent, if applicable). The seller will provide proofs of any inspection, warranties, etc.

The bank attorney will have a stack of papers for you and the seller to sign. While he or she will give you a basic explanation of each paper, you will want to take the time to read each one and/or consult with your agent or lawyer to make sure you know exactly what you're signing. After all, this is a large amount of money you're committing to pay for a long time to come. Before you go to closing, your lender is required to give you a booklet explaining the closing costs, a "good faith estimate" of how much cash you'll have to supply at closing, and a list of documents you'll need at closing. If you don't get those items, be sure to call your lender BEFORE you go to closing. Don't hesitate to ask questions.

Once you're sure you understand all the documentation, you'll sign the mortgage, agreeing that if you don't make payments the mortgage lender is entitled to sell your property and apply the sale price against the amount you owe plus expenses. You'll also sign a mortgage note, promising to repay the loan. The seller will give you the title to the house in the form of a signed deed. You will pay the lender's agent all closing costs and, in turn, he or she will provide you with a settlement statement of all the items for which you have paid. The deed and mortgage will then be recorded in the state Registry of Deeds.

The closing generally last about an hour. At the end of the closing you will receive what you've eagerly been waiting for all along - the keys to your new home!