Once you've signed a contract to buy a house, the preparation for settlement begins. Settlement, or closing escrow, is the process of transferring the title (ownership) of the home from seller to buyer.

Often, the real estate agents involved in the sale help you take care of these arrangements. But the buyer and seller are ultimately responsible for attending to these details.

Here are the basics.

BUYER'S RESPONSIBILITIES

The buyer must first secure the financing to buy the house. Usually this means taking out a mortgage loan. Most lenders require a complete financial picture, including income and expenses, and a credit check. In addition, most want an up-to-date appraisal of the home, a survey of the property and, often, some inspections (for termites, radon gas, etc.). Some lenders specify which service providers they want the borrower to use. Once all the paperwork is in, the borrower should keep in touch with the lender until receiving a loan commitment.

The buyer needs to purchase a hazard insurance policy (also called homeowner's insurance) -- usually bringing a paid receipt to settlement -- to protect the lender. If the buyer wishes to bring an attorney to settlement, arrangements should be made 30 to 60 days in advance.

A few days before settlement, the buyer should receive a Good Faith Estimate of settlement costs. In addition to the loan commitment letter, the buyer must bring a certified or cashier's check for the down payment and any other costs due at settlement. These costs include mortgage interest from the closing date to the first payment due, escrow for property taxes and insurance, and various taxes and recording fees. Be sure to bring your regular checkbook in case miscellaneous costs need to be paid.

Both the buyer and seller need to give the settlement agent all pertinent information requested. And, since many long and detailed forms are usually signed at settlement, you might consider requesting copies of the basic settlement forms several days in advance to read them and familiarize yourself with the process. The focus at the settlement table will be on checking the exact figures to be sure everything is accurate.

If you cannot come to closing, be sure to notify the settlement agent in advance so a Power of Attorney can be prepared. Once the papers are signed and money paid, the keys are handed over to the buyer and the sale is complete.