What is a 'Settlement Agent'

A settlement agent is a party who helps complete a transaction between a buyer and seller. This is done through the transfer of securities to the buyer and the transfer of cash or other compensation to the seller.

For a real estate transaction, closing agents are professionals who function chiefly for the buyer by conveying the selling interest from the buyer to the seller and ensuring the orderly transfer of the legal title from the seller to the buyer through the closing process.

A settlement agent plays a central role in ensuring a "quick close." As such, not all agents are the same. For challenging transactions, specialized skills and knowledge may be required; even a seasoned agent can be tested under the pressure of a high stakes close.

Settlement agents are also known as a "closing agents" or "conveyancers."

BREAKING DOWN 'Settlement Agent'

During the settlement of a trade in which actual securities and money are exchanged, which will occur several days after the original transaction, settlement agents are responsible for settling the accounts of traders and making the process more efficient. With real estate, the duties of a settlement agent can extend to examining land titles for accuracy, pro-rating property fees for the current year of the transaction and interacting with local and state agencies to notify them about the transfer of ownership.

More specifically, a settlement agent is an escrow agent, real estate attorney or representative of a title company that conducts the closing or "settlement" of a home purchase transaction. Other functions include coordinating the attendance and document signing for all the parties, and the verification that each side has performed their required responsibilities as outlined in the contract. The settlement agent disburses all funds and title & deed to the appropriate parties after checking that all conditions are met at a transaction's close.

RELATED TERMS
  1. Open Listing

    An open listing is a property listing that uses multiple real ...
  2. Net Settlement

    Net settlement refers to the resolution of all of a bank's transactions ...
  3. Revenue Agent

    A revenue agent is an accountant employed by the Internal Revenue ...
  4. Transfer Procedures

    The procedure by which ownership of a stock moves from one party ...
  5. Paying Agent

    A paying agent is an agent who accepts payments from the issuer ...
  6. Transfer Agent

    A transfer agent keeps records of who owns a publicly traded ...
Related Articles
  1. Investing

    What Real Estate Agents Don't Want You To Know

    While they can be instrumental in helping you buy or sell a home, real estate agents may ulterior motives.
  2. Investing

    How To Find The Best Real Estate Agent

    Most people don't have the time, expertise or motivation to go it alone and finding a good real estate agent becomes essential to enjoying a smooth real estate transaction.
  3. Investing

    How Do Real Estate Agents Get Paid?

    Most real estate agents are paid a commission based on the sale price of a property and split between the agents and brokers involved.
  4. Investing

    5 Ways To Save On Real Estate Fees

    Even a 1% reduction in real estate commissions can save you thousands of dollars.
  5. Investing

    8 reasons to sell your home with an agent

    The standard real estate agent cost you 6% of the total house sales, learn what value do they bring you. See if it is worth to hire a sales agent in a housing sales.
  6. Investing

    How to Choose the Right Real Estate Broker

    Buying or selling a home can be the major financial transaction of your life. Here's how to choose the right real estate broker or agent.
  7. Investing

    The Lowdown On Low-Fee Real Estate Agents

    Find out how the services of low-commission real estate agents comapare to full-service realtors.
  8. Investing

    8 Tips For Recession House Hunters

    Follow these eight tips to get a leg up on rival bargain hunters.
  9. Insurance

    How to Become a Life Insurance Agent

    The pros and cons of selling life insurance, a field that can be hard to crack, but can pay off big when you do.
  10. Investing

    How Real Estate Agents Sell Their Homes For More

    A well-publicized statistic finds that when real estate agents sell their own homes, they tend to get a higher price. But why?
RELATED FAQS
  1. How Do Real Estate Agents Get Listings?

    Learn about how real estate agents get listings in top real estate markets, as well as in smaller areas, through utilizing ... Read Answer >>
  2. What is the role of agency theory in corporate governance?

    Understand how businesses use agency theory in corporate governance. Learn how moral hazard problems may be addressed using ... Read Answer >>
Hot Definitions
  1. Futures Contract

    An agreement to buy or sell the underlying commodity or asset at a specific price at a future date.
  2. Yield Curve

    A yield curve is a line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but ...
  3. Portfolio

    A portfolio is a grouping of financial assets such as stocks, bonds and cash equivalents, also their mutual, exchange-traded ...
  4. Gross Profit

    Gross profit is the profit a company makes after deducting the costs of making and selling its products, or the costs of ...
  5. Diversification

    Diversification is the strategy of investing in a variety of securities in order to lower the risk involved with putting ...
  6. Intrinsic Value

    Intrinsic value is the perceived or calculated value of a company, including tangible and intangible factors, and may differ ...
Trading Center