What does a settlement statement include?

A settlement statement, also known as a closing statement, serves a critical function during the closing process of a real estate transaction. It provides an itemized list of all the funds that are being paid at closing, detailing the financial aspects of the transaction. This typically includes the purchase price of the property, loan amounts, closing costs, adjustments for property taxes, and any prepayments or deductions that have been agreed upon.

By presenting these details, the settlement statement ensures that both the buyer and seller understand how much money is involved in the final transaction and where that money is allocated. This transparency helps prevent disputes and promotes trust between parties.

In contrast, mortgage eligibility requirements, property inspection reports, and property tax liabilities, while important aspects of real estate transactions, do not form part of a settlement statement. A settlement statement specifically focuses on the financial transactions occurring at the closing of the sale rather than broader eligibility or tax considerations.