Closing is the final stage of a real estate transaction. It is the point at which all documents are signed, all funds are transferred, and legal ownership of the property moves from the seller to the buyer. Once closing is complete, the transaction is finished.
The word “closing” is sometimes used to describe both the period leading up to the final signing and the signing event itself. This guide explains what closing means, what happens during it, and how the process works specifically in Arizona.
What “closing” means in a real estate transaction
In a real estate transaction, closing — sometimes called the close of escrow — is the moment when all of the conditions of the purchase contract have been satisfied and the transaction is finalized. Those conditions typically include the completion of inspections, the buyer’s mortgage approval, the appraisal, and the title review.
When all conditions are met, the escrow company coordinates the final signing of documents, the transfer of funds, and the recording of the deed with the county. Once the deed is recorded, the buyer is the legal owner of the property.
For a full explanation of what the escrow company does throughout a transaction, see our guide: What is escrow, and what does it do?
What happens before closing day
Several things must be completed before closing can take place.
The lender issues what is called a “clear to close,” which means the buyer’s loan has been fully approved and the lender is ready to fund. Federal law requires lenders to deliver a document called the Closing Disclosure to the buyer at least three business days before the buyer signs the loan documents. The Closing Disclosure is a standardized five-page document that shows the final loan terms, the monthly payment amount, all closing costs, and the exact amount the buyer needs to bring to closing. Buyers are entitled to review this document carefully before signing anything.
The escrow company prepares a settlement statement that shows every dollar coming into and going out of the transaction — the purchase price, the loan proceeds, the earnest money deposit already held in escrow, all fees and closing costs owed by each party, prorated property taxes and HOA dues if applicable, and the net proceeds the seller will receive.
Shortly before closing — typically within one to two days — the buyer conducts a final walkthrough of the property. The purpose of the walkthrough is to confirm that the property is in the same condition it was in when the offer was made, and to verify that any repairs the seller agreed to make have been completed. The walkthrough is not a second inspection. It is a condition check.
How signing works in Arizona
In Arizona, buyers and sellers typically sign their closing documents in separate appointments rather than at the same table. This is standard practice in Arizona’s escrow-based closing system and does not affect the outcome of the transaction. The escrow officer coordinates both signings and manages the logistics.
Signing can take place at the escrow or title company’s office, through a mobile notary who comes to a location convenient for the signer, or through remote online notarization, depending on the escrow company and the lender’s requirements.
All signers whose names will appear on the deed or loan documents must present valid government-issued photo identification at signing. The name on the identification must match the name on the documents exactly.
What the buyer signs at closing
The buyer signs a larger set of documents than the seller, particularly in a financed transaction. The documents the buyer signs at closing typically include the following.
The promissory note is the buyer’s written promise to repay the mortgage loan. It states the loan amount, the interest rate, the repayment schedule, and the consequences of failing to make payments.
The deed of trust is the document that secures the loan by placing a lien on the property. It gives the lender the legal right to foreclose on the property if the borrower fails to meet the loan obligations. In Arizona, most residential mortgage loans use a deed of trust rather than a mortgage.
The Closing Disclosure is signed to confirm that the buyer has received and reviewed the final loan terms and closing costs.
The buyer also signs various lender disclosures and acknowledgments required as part of the loan transaction, as well as the settlement statement confirming all debits and credits.
What the seller signs at closing
The seller signs fewer documents than the buyer. The primary document the seller signs is the deed, which is the legal instrument that transfers ownership of the property from the seller to the buyer. The seller also signs an affidavit confirming their legal right to sell the property and that there are no undisclosed liens or claims against it, as well as the settlement statement and any loan payoff authorizations if the seller has an existing mortgage being paid off from the sale proceeds.
How funds are transferred at closing
Buyers do not bring a personal check to closing. Funds to close are delivered either by wire transfer — meaning the buyer’s bank sends the funds electronically to the escrow company’s trust account — or by cashier’s check drawn on a U.S. bank. Some escrow companies require a wire transfer for amounts above a certain threshold, so buyers should confirm the accepted method with their escrow officer before closing day.
The exact amount the buyer needs to wire is shown on the Closing Disclosure and the settlement statement. Buyers should verify wire transfer instructions directly with the escrow officer by phone before sending any funds. Wire fraud — in which a fraudulent party intercepts communications and substitutes false wire instructions — is a documented risk in real estate transactions. Wiring instructions should never be followed based solely on an email, particularly one that arrives unexpectedly or asks for a change to previously confirmed instructions.
Once the escrow company receives all funds from the buyer and the lender, it distributes the money according to the settlement statement. This includes paying off any existing mortgage on the property, paying all closing costs and fees owed by each party, and releasing the net proceeds to the seller.
How recording works in Arizona
After all documents are signed and all funds are received, the escrow company submits the deed and any loan documents to the county recorder’s office for recording. Recording is the process by which the transfer of ownership is entered into the public record.
Maricopa County supports electronic recording, which means recording often occurs the same day or the following business day after closing. Once the deed is recorded, the buyer is the legal owner of the property, and the keys are released.
The closing date written into the purchase contract is the date by which the transaction is expected to close. However, closing does not officially occur until the deed is recorded — not when documents are signed.
What closing costs are due at closing
Both buyers and sellers pay certain costs at closing. For buyers, these typically include lender fees, appraisal fees, title insurance, escrow fees, prepaid homeowners insurance, prepaid interest, and property tax reserves. For sellers, these typically include escrow fees, the county recording fee, prorated property taxes, and any HOA transfer fees if the property is part of a homeowners association.
The full breakdown of what buyers and sellers each pay at closing is covered in detail in our guide: What are closing costs, and who pays them?
Frequently asked questions
Do buyers and sellers have to be in the same room at closing in Arizona? No. In Arizona, buyers and sellers typically sign their closing documents in separate appointments coordinated by the escrow company. They do not need to be present at the same time or location.
When does the buyer officially own the property? The buyer becomes the legal owner of the property when the deed is recorded with the county recorder’s office — not when documents are signed. In Maricopa County, recording often occurs the same day as signing, but it can also occur the following business day.
What if something is wrong on the Closing Disclosure? Buyers have the right to review the Closing Disclosure for at least three business days before signing. If any figures appear incorrect — a fee that does not match what was expected, a loan term that differs from the original agreement — the buyer should raise the discrepancy with the lender or escrow officer before signing. Certain changes to loan terms can require a new Closing Disclosure to be issued, which restarts the three-business-day review period.
What happens if the buyer’s funds do not arrive in time? If the buyer’s funds do not arrive in the escrow account by the time needed to fund and record on the agreed closing date, the closing may be delayed. Delays can have consequences under the purchase contract, including potential penalties or, in some cases, the right of the other party to cancel. Buyers using wire transfers should send funds at least one business day before the scheduled closing date to allow time for the wire to clear. Buyers bringing a cashier’s check should confirm timing and delivery requirements with the escrow officer in advance.
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