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Settlement (or “closing”) is the formal transfer of real property through the execution of legal documents, the
exchange of money or consideration, and the recordation of the transaction at the courthouse.
The coming together of the parties to the transaction occurs at the “settlement table”, and it is here that all
documents are executed, meeting the requirements set forth by the sales contract and lender.
In Virginia, these documents commonly include a Deed of Conveyance, Deed of Trust Note, Deed of Trust, a final “Truth-in-Lending” document prepared by the lender, a Disclosure Statement and a Uniform Settlement Statement, referred to as the “HUD-1”. Other documents may also be required depending on the financing placed on the property and the requirements of the individual lender.
The type of documents you are asked to sign and the fees you are asked to pay will depend on the terms set forth
in the sales contract and the form or type of financing you have chosen for your purchase.
Settlement is the perfect word to describe this transfer procedure, since it is here that the financial accounts
between seller and buyer, their respective lenders, agents, surveyors, termite inspectors, and others will be brought forward and “settled.” Then, immediately after the settlement, the legal documents will be taken to the courthouse in
the jurisdiction where the property is located. After a second title examination has been made to insure no additional or new liens were recorded since the date of the first examination and if all required funds have been received by
the settlement agent, the change of ownership is recorded.
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