The settlement, or closing, is the final step when the sellers sign the deed to the buyers and the buyers provide the funds for the purchase of their new property.  In Maryland, the settlement is conducted with a settlement agent (usually an attorney), buyers, sellers, and their agents meeting face-to-face.  The settlement attorney will first present the HUD-1, a standard form summarizing the specific funds credited and debited for the transaction, explaining each charge or credit to the buyers and sellers. When everyone has agreed that the HUD-1 is correct, they sign the bottom. The attorney will have the sellers sign the deed, which transfers title (the rights to ownership) to the buyers. The buyers will, with the attorney’s guidance, sign all documents relative to their new loan and will provide funds for the down payment and closing costs. These funds can be by treasurer’s, bank, or cashiers check or can be bank-wired funds. The attorney cannot accept cash or personal checks for large amounts. It is recommended, however, that the buyers bring a personal checkbook anyway, in the event that the funds they had previously arrange for are not adequate by some small amount. The exact charges to the buyer are not known until the HUD-1 has been finalized in conjunction with the lender’s instructions to the attorney, which can be right before settlement. Therefore, I will assist my buyer-client in the calculation of an estimated cost, which can be used to draw up the cashiers check or bank wire.

Once all documents are signed, the attorney will have copies made, any checks that are appropriate drawn up (typically a net check for the sellers’ proceeds), and the house keys can be given to the buyers.

The buyers choose the settlement company (often called a title company), and this right is protected by federal law (RESPA, the Real Estate Settlement and Procedures Act). The settlement company works for the transaction itself, accomplishing tasks required in the sales contract on behalf of the sellers, buyers, lender, and title insurance company. Each party may, if they choose, hire their own individual counsel to accompany them at the settlement.

It is important to choose a company that is experienced in conducting real estate settlements. Many general practice attorneys will conduct a settlement, but, if it is not their specialty, it is my experience that some of the many minutia involved in completing the transaction can be overlooked. There are excellent settlement companies in the DC Metro area, and many of them, Long & Foster Prestige Partners, will offer a discounted fee to my Long & Foster buyer clients. Ask for a list of estimated charges from each company to compare total fees.

Here is a list of some title companies that have done excellent work for my clients in the past:

Calculate Your Estimated Closing Costs using RGS Title's calculators for buyers and sellers.