Basic Steps of Closing

“Closing” (or “settlement”) is the point in time at which the title to property changes hands between the buyer and seller. Buying a home is an exciting time and the more you know about the process, the more relaxed you’ll be going through it.

Starting the process

Once the seller accepts the sales contract or purchase agreement, the closing process begins, and we open a file for the transaction. Timing is essential to make sure all the components for a successful closing are in place for your arrival. An initial deposit called “earnest money” is tendered by you with your offer to buy the property.

Title search and examination

A search is made of the public records for any documents that affect the title to the property, including deeds, mortgages, special assessments, liens, wills, divorce settlements, and other records. For example, the previous owner may have failed to pay taxes. Or there may be an outstanding mortgage or judgment on the property. Pennington Title works hard to see that such obligations are identified and resolve any issues we find well before you go to closing. Upon completion of the search and examination, a preliminary report known as a “title commitment or commitment to insure” is prepared and sent to you and any other interested parties.

Preparation for the closing

In preparation for the closing, Pennington Title reviews instructions from your lender and other parties to the transaction, obtains loan payoffs, reviews legal and loan documents, assembles charges, calculates prorations, prepares closing statements, and schedules the closing.

Closing the transaction

One of our caring, talented closing coordinators oversees the closing of the transaction. At this time the title changes hands as the seller signs the deed, and title affidavit among other seller documents, and the buyer signs the closing documents provided by the lender and real estate broker. The seller receives payment, and other expenses are paid, such as the previous loan, realtors’ commissions, and attorneys’ fees. Each party signs a separate settlement statement which summarizes the financial details of their side of the transaction.


After the signing has been completed, the transaction documents are filed of public record in the office of the Pennington County Register of Deeds. A final search and examination is conducted to verify the recording and ascertain the changes to the title since the title commitment was prepared. Lastly, title insurance policies are issued and delivered to the new lender and to you. But you don’t have to be concerned about any of this; we eliminate that worry from your list by taking care of it all for you!

(Information on this page courtesy of Stewart Title Guaranty Company and the American Land & Title Association.)