In real estate, what is a "closing statement"?

A closing statement is a critical document in real estate transactions, providing a detailed account of all financial transactions related to the sale of a property. It itemizes the fees and costs associated with the transaction, including credits and debits to both the buyer and seller. This document ensures transparency by breaking down costs such as loan origination fees, property taxes, title insurance, and real estate commissions, giving both parties a clear understanding of the financial aspects of the sale.

It is vital for buyers and sellers to review the closing statement to confirm that the terms of their purchase agreement have been fulfilled and to ensure that all financial liabilities and credits are accurately accounted for. This level of detail is essential for preventing disputes and ensuring that both parties are satisfied with the transaction's financial outcome.