What is a "closing" in a real estate transaction?

In a real estate transaction, a "closing" refers specifically to the step where the title of the property is transferred from the seller to the buyer and all necessary documents are finalized. This includes the signing of essential paperwork, such as the deed, mortgage documents, and any other agreements that are part of the transaction. Closing is the culmination of the real estate process, where payment is made, and the transfer of ownership is officially recorded.

This distinguishes it from merely signing contracts, as it involves a series of actions necessary to complete the transaction successfully, including the disbursement of funds and the recording of the new ownership with local governmental entities. Additionally, it is more definitive than just discussing property value or engaging in preliminary negotiations, as those stages occur well before the actual transfer of ownership takes place.