Closing Costs: Settlement and Escrow

Set with solid jobs, nice cars and a baby on the way, there was only one thing Liz and Wes Clayton were missing: the perfect house. They had no problem tracking down the ideal three-bedroom ranch in Fairfax, Va., negotiating a price or securing a loan -- it was the closing costs that left them less than settled.

"The only real problem we had came when we went to close the deal," says Wes. "Our closing costs were just astronomical. We really weren't prepared for that kind of bill."

The Claytons, like most first-time homebuyers, had no idea what goes into the settlement and closing process, including those pesky closing costs. Here's what you need to know to close the deal.