Settlement practices differ from State to State. In some parts of the country settlement may be conducted by an escrow agent, which may be a lender, real estate agent, title company, representative, attorney, or an escrow company. After entering into a contract of sale, the parties sign and escrow agreement which requires them to deposit specified documents and funds with the agent. Unlike other types of closing, in a so-called escrow closing the parties do not meet around a table to sign and exchange documents. The agent may request a title report and policy; draft a deed or other documents; obtain rent statements; pay off existing loans; adjust taxes, rents, and insurance between the buyer and seller, compute interest on loans; and acquire hazard insurance. All this may be authorized in the escrow agreement. If all the papers and monies are deposited with the agent within the agreed time, the escrow is "closed".

The escrow agent then records the appropriate documents and gives each party the documents and money each is entitled to receive, including the completed HUD-1 Settlement Statement. If one party has failed to fulfill its agreement, the escrow is not closed and legal complications may follow.

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