The ALTA Settlement Statement, also known as the HUD-1 Settlement Statement or simply the closing statement, is a standardized form used in real estate transactions in the United States. It is provided to both the buyer and the seller at the closing of a real estate deal, outlining the financial details of the transaction.
Key Components of the ALTA Settlement Statement:
a. Transaction Information: This section includes details such as the names of the buyer and seller, the property address, and the date of closing.
b. Sales Price and Credits: The statement breaks down the total sales price of the property and lists any credits or adjustments, such as seller concessions or deposits.
c. Prorations and Adjustments: This section covers prorated items like property taxes, homeowner association (HOA) dues, and other relevant expenses. It ensures that both parties pay their fair share of ongoing costs.
d. Escrow Account Information: If an escrow account is established for items like property taxes and insurance, the ALTA Settlement Statement provides details on the initial deposit and ongoing payments.
e. Title Charges and Fees: This section outlines the costs associated with title insurance, title search, and other title-related services.
f. Government Recording and Transfer Charges: Fees for recording the deed and transferring ownership are detailed here.
g. Total Settlement Charges: The ALTA Settlement Statement concludes with a summary of all charges and credits, providing a comprehensive overview of the financial aspects of the transaction.
Why reviewing your Settlement Statement prior to closing is important
Reviewing the ALTA Settlement Statement ensures that all financial details are accurate. Any discrepancies or errors can be addressed before the closing, preventing post-closing complications. Buyers and sellers need a clear understanding of their financial obligations in the transaction. A careful review helps prevent last-minute surprises during the closing process. Parties can address concerns or questions in advance, fostering a smoother closing experience.
