What does the term "closing" refer to in real estate transactions?

In real estate transactions, "closing" refers to the finalization of a deal where ownership of the property is officially transferred from the seller to the buyer. This process involves the signing of all necessary documents, such as the sales contract, mortgage agreements, and title transfer documents, and typically concludes with the buyer paying the purchase price and receiving the keys to the property. Closing is a critical step that ensures all conditions of the sale are met, funds are exchanged, and the buyer obtains a legal title to the property.

The initial offer made on a property does not constitute a closing; rather, it is a preliminary step in the buying process. Signing a lease pertains to rental agreements, which is distinct from the buying and selling of properties. The negotiation period is also an earlier phase that precedes closing, as it deals with the terms and conditions of the sale before they are formally agreed upon. Thus, the correct understanding of closing is essential for anyone involved in real estate transactions, as it marks the culmination of the purchasing process and the transition of property ownership.