Understanding Real Estate Settlements

Contact our attorneys for help with real estate settlements in Pennsylvania.

Ensuring a smooth real estate settlement - or “closing” - can be challenging at times, especially without the right knowledge and support at hand. This is where a real estate attorney can help.


According to the Realtors Confidence Index Survey published in June 2024 by the National Association of Realtors, around 5% of deals fall through, and 13% experience delayed settlement. The reasons for these pitfalls are varied, from title defects to appraisal discrepancies. Working with a lawyer is essential to ensure a smooth legal journey, and ensure that both the buyer and the seller can proceed with confidence.


Real Estate Settlements: An Overview


Real estate settlements are often referred to as closings. This term describes the final step in transferring property ownership from seller to buyer. This legal process encompasses multiple aspects to ensure that the transaction is legitimate and lawful.


From a legal perspective, settlements finalize the contractual obligations outlined in the purchase agreement. They involve the transfer of the title from the property owner to another, recording of essential documentation and disbursement of funds.


Process And Documents Involved


The process of selling or purchasing real estate can vary in length. Real estate settlements are the last step of this process and involve the production and finalization of a range of essential documents. These documents and steps can vary, but they often include:


  • Title Search: Verifies that the seller has the legal right to transfer the property. It is also used to check for liens or encumbrances.
  • Title Insurance: It provides protection against future claims to the property.
  • Loan Documentation: It outlines the terms of financing, when applicable, including mortgage terms.
  • Homeowner’s Insurance: May be required for property protection, especially when there is financing.
  • Property Survey: It confirms property boundaries and identifies any issues of which both the seller and the buyer need to be aware of. An inspection report that evaluates the property condition may also be required.
  • Once these documents and steps are fulfilled, a lawyer can produce or help to review the following documents:
  • Settlement statement, or a summary of financial transactions regarding the sale and purchase of the property.
  • A deed that confirms the transfer of ownership from seller to buyer.

Common Issues In Real Estate Settlements


According to the Top Agent Insights survey by HomeLight, some of the most common issues in real estate settlements include:


  • The buyer identifies major issues during the home inspection (42%). The seller not preparing the home as expected is also a significant pitfall that can sometimes arise.
  • Buyers back out of the contract because of unforeseen costs (41%). These include today’s high interest rates, but also the inability of securing funds. Contingencies regarding financing are often included in the sale agreement for the property.
  • Discrepancies emerging during the home appraisal (8%): These include undisclosed property issues or specific requirements for financing such as FHA financing.
  • Title defects (1%): these include unexpected or unresolved liens or claims.
  • Other common challenges include incomplete documentation, legal missteps (such as non-compliance with state or federal regulations), and survey disputes, like boundary issues.


Best Practices For Smooth Settlements: The Role Of A Real Estate Lawyer


A real estate lawyer plays a pivotal role in helping both buyers and sellers navigate a real estate settlement without issues, by:


  • Help follow best practices, which minimize errors and prevent discrepancies.
  • Conduct thorough title searches to identify and mitigate potential issues early.
  • Review and prepare all necessary documentation to ensure accuracy and compliance
  • Facilitate clear communication among all parties, which helps resolve any disagreements or misunderstandings.
  • Provide legal advice to help clients navigate complex situations and make informed decisions.


Managing a real estate settlement can be complex. Contact Bingaman Hess today to schedule a consultation with one of our experienced real estate attorneys. Our team of seasoned legal professionals brings a wealth of talent and experience to every case, ensuring that you receive the highest level of representation and personalized attention.


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