Closing statements are documents that detail the terms of a business transaction between a supplier and a customer, such as in real estate. They contain all pertinent information associated with the transaction and serve as a cover page for all individual documents associated with the sale.
Closing statements are a common business document that help detail the terms of a business transaction between a supplier and a customer. One of the most common types of closing statement is the real estate transaction. Closing agents prepare the statement and typically review each line with the client before the transaction is considered complete.
Sometimes referred to as a settlement sheet or HUD-1, a closing statement will contain all pertinent information associated with the transaction. In the case of real estate offers, the declaration will include a series of elements in addition to the purchase price. The real estate closing statement will also list any escrow information, including escrows intended to cover taxes, and all types of processing fees incurred as part of the business agreement.
Other items included in the closing statement will depend on the exact nature of the transaction. In the event that the purchase is made with the origination of a mortgage, the statement will include information about any mortgage insurance and associated fees that will be in effect during the term of the loan. The commissions earned by the closing agent will also be listed, along with the points associated with the sale. In the event that hazard insurance is required for the purchase of property in the area, this will also be included in the closing statement.
The purpose of the closing statement is to provide a single document that captures all relevant information regarding the business transaction. Instead of having to rely on locating details by sorting through several different documents, the closing statement presents all the details in an orderly, accurate format that the buyer and seller can quickly read and agree on. From this perspective, the closing statement serves as an excellent cover page for all of the individual documents associated with the sale.
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