Closing Statement
Definition and meaning of Closing Statement in real estate.
A closing statement is a detailed financial document that outlines all the final costs, credits, and debits for both the buyer and the seller in a real estate transaction. It provides a complete accounting of where all the funds in the transaction are allocated.
In more detail
This document is prepared by the closing agent, who may be an attorney or a title company representative, before the final transaction occurs. For buyers, the statement shows the purchase price, loan amount, down payment, and prepaid expenses such as property taxes. For sellers, it highlights the sales price, real estate commissions, mortgage payoff amounts, and net proceeds.
Both parties must review this statement carefully to verify that all financial terms align with the purchase agreement.
Key facts
| Category | Legal, Titles & Closing |
|---|---|
| Required by | Federal law for residential mortgage transactions |
| Also known as | Settlement statement or Closing Disclosure |
| Who prepares | Closing agent or escrow officer |
A seller reviews their closing statement before signing the final papers to verify that the real estate agent's commission and their outstanding mortgage payoff amount are listed correctly.
Frequently asked questions
What is the difference between a Closing Disclosure and a closing statement?
A Closing Disclosure is a standardized form required by federal law for buyers with mortgages, whereas a closing statement can refer to any summary of final transaction costs for either party.
When should I receive my closing statement?
Federal regulations require lenders to provide the buyer with the Closing Disclosure at least three business days before the closing meeting.