Settlement and Transfer Possession

TLDR: Ownership will legally transfer at settlement. Possession will occur when the buyer physically takes the property.

For an introduction to settlement, closing, and possession, refer back to Step 2: Settlement and Possession

At settlement, the process is usually fairly simple: you transfer the down payment and closing costs to the title company, sign an enormous pile of papers, and get the keys to the property. You'll need to remember to bring your ID, and if the property will be purchased in the name of a legal entity or trust, you'll need documents that prove you have the authority to make the purchase. 

Closing Documents for Sellers

Below is a list of documents you'll likely see at closing. Familiarizing yourself in advance will go a long way toward instilling the confidence to ask questions. 

Bill of Sale

Similar to a deed, a bill of sale documents the transfer of ownership from the seller to the buyer. 

Certificate of Title 

A certificate of title declares the owner of the property. It's generated by the state or municipality in which the property is located.


This ratification of this document formalizes the transfer of the property. The deed includes the description of the property as well as identifies the seller and buyer. 

Mortgage Loan Payoff Agreement

A mortgage loan payoff agreement guarantees that the seller will pay off the outstanding balance on their mortgage. This document functions so that the amount still owed by the seller to their lender does not interfere with the home sale. This document is unnecessary if the seller has already paid off their mortgage.

Bill of Sale for Personal Property

Sellers including personal items in the sale must fill out and sign a bill of sale for that personal property. Not all home sales involve the transfer of personal property. As a result, standard closing documents do not account for this. A separate bill of sale allows the seller and homebuyer to transact the sale of personal items during closing.