What is referred to as "settlement" in the context of a real estate transaction?

In the context of a real estate transaction, "settlement" refers specifically to the process of title closing. This is the point at which all parties involved finalize the transaction, execute necessary documents, and transfer ownership of the property. During settlement, the buyer pays the seller, or the seller agrees to pay off any existing mortgages, and the title is transferred from the seller to the buyer. This process often involves a closing agent or attorney who ensures all necessary paperwork is completed and funds are properly handled.

Settlement encompasses key actions such as the review and signing of the closing disclosure, which outlines all costs associated with the transaction. It is a crucial juncture that legally binds all parties to the agreement. Other options, while related to aspects of a real estate transaction, do not encapsulate the full scope of what settlement involves. For example, property inspection is an assessment of the property's condition, deed transfer specifically denotes the act of formally changing ownership, and loan approval is necessary for securing financing but does not represent the completion of the sale. Therefore, settlement is best represented as title closing, where the finalization of ownership and financial exchange occurs.