What is the closing process in a real estate transaction?

Closing, also called settlement or escrow, is the final step where ownership transfers from seller to buyer. At closing, the buyer signs mortgage documents and pays closing costs, the seller signs the deed and any required affidavits, the lender funds the loan, the title company distributes funds to pay off the seller's existing mortgage, real estate commissions, prorated taxes and insurance, and other costs. The deed and mortgage are sent for recording. The buyer receives keys and possession.