Closing Statement

A detailed cash accounting of a real estate transaction prepared by a broker, escrow officer, attorney, or other person designated to process the mechanics of the sale, showing all cash received, all charges and credits made, and all cash paid out in the transaction. A closing statement may also be called a settlement statement or adjustment sheet—in all federally related loans, the HUD-1 settlement sheet is used. The statement shows how all closing and adjustment costs plus prepaid and unpaid expenses are allocated between the buyer and the seller. In many areas, separate closing statements are prepared for the buyers, showing credits, charges, and the balance due from them at closing; for the sellers, showing credits, charges, and the proceeds they will receive at closing; and for the broker, showing a detailed accounting of all monies received and disbursed in the transaction.