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Documents you can expect to see at a real estate closing

On Behalf of | Sep 28, 2021 | Residential Real Estate |

Many homeowners remark about how much paperwork they have to sign when making a formal offer on a Philadelphia property. You should expect to sign just as many papers (if not more) at your residential real estate closing.

Pennsylvania doesn’t require prospective homeowners to have an attorney at their real estate closing — but not having one present means that there’s nobody there to make sure that all the documents are correct.  It’s critical that you know about some of the documents you can expect to see at your closing and the significance of each.

Deed and tax transfer documents

The primary document you will see at your real estate closing will effectuate the transfer of ownership from the seller to you as the buyer.  This document is called a deed. 

If you’ve borrowed money from a lender to purchase the property, then you will see two other documents called a mortgage and a promissory note.  The seller of the property will sign a deed transferring ownership of the property to you.  The deed will be recorded at the county courthouse.  You will sign the mortgage and promissory note.  The mortgage (sometimes called a deed of trust) will also be recorded and this is the document that gives the lender a lien on in the property as long as the debt is outstanding.  The mortgage (or trust deed) gives the lender the right to foreclose on your home if you default in paying them.  

You can also expect to sign a document acknowledging the transfer of property tax obligations from the seller to you when attending the closing on your residential real estate. 

Mortgage documents

You will sign a promissory note which is the evidence of the debt to the lender.  This document will not be recorded but contains very important details about the money you’ve borrowed, including. 

  • The amount of money you’ve borrowed, called the face amount of the loan
  • How long your mortgage payments will last, called the term of the loan
  • Your interest rate
  • The amount of each monthly payment (not including whatever you have to pay for property tax or homeowners insurance)
  • Where to send mortgage payments
  • What happens if you fail to pay what you owe

Your lender may also have you sign an escrow disclosure statement that discloses how much of the mortgage payments you make will go to covering property tax or homeowners insurance. 

Settlement statement

You will also sign a settlement statement at your closing.  This document itemizes the costs that you will pay at closing.  You should receive an estimated settlement statement prior to closing so that you can review everything before closing.  You will ultimately pay the purchase price at the closing by cashier’s check or wire transfer.

Knowing what to expect to sign at your real estate closing allows you to research the documents and ask questions so that you don’t make any costly mistakes. 

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