The Settlement Process
At the settlement, two transactions take place, the sales transaction between the seller and buyer, and the closing of the loan or cash transaction. The sales transaction consists of the seller executing and delivering a Deed conveying the property to the buyer. The title agency will record the Deed in the land records of the local jurisdictions to notify publicly that the buyer is now the new owner of the property.
At the closing of the loan which buyer has secured to finance the purchase, the buyer executes the various loan documents, including the Promissory Note, Deed of Trust, and loan disclosure statements. The title agency will record the Deed of Trust, which places a lien against the property to secure the repayment of the loan, as well as the Deed to the property, in the land records.
At settlement, the buyer pays to the title agency by cashier’s or certified check the figure shown as due from the buyer on the settlement statement. This check, as well as the loan proceeds check from the buyer’s lender, is deposited in the he title agency’s escrow account, from which the title agency will write and issue a check to the seller and make al other disbursements shown on the settlement statement. These disbursements are made after the title agency has recorded the Deed and Deed of Trust in the land records, usually the next business day after settlement.