What is an Escrow Settlement Statement?
An escrow settlement statement, also known as a closing statement determines who pays what and who receives money. It was formerly referred to as a HUD-1 statement. It is a document used in real estate transactions in Idaho to itemize all of the charges and credits that the buyer and seller are responsible for in the sale of a property. The statement is typically prepared by the escrow officer or title company handling the transaction and is used to ensure that all parties are aware of and agree to the terms of the sale before the transaction is completed. This is important because the settlement statements determines disbursement of funds. If property is transferred incorrectly, or funds are disbursed incorrectly, difficult situations can arise. As a buyer or seller, it is one of the most important documents you will review and sign.
Items on a Settlement Statement
Some of the costs and fees that may be found on a settlement statement include:
- Purchase price: The agreed upon price for the property.
- Homeowner Association (HOA) Transfer fee.
- Down payment: The amount of money paid by the buyer upfront to the seller.
- Loan amount: The amount of money borrowed by the buyer from a lender.
- Interest rate: The rate at which interest will accrue on the loan.
- Closing costs: Fees associated with the sale of the property, such as title search fees, title insurance, recording fees, and notary fees.
- Property taxes: Taxes that are prorated between the buyer and seller for the portion of the year that each party owns the property.
- Homeowners insurance: Insurance that protects the property and the homeowner from damage and liability.
- Appraisal fee: The fee charged by an appraiser to determine the value of the property.
- Survey fee: The fee charged to survey the property.
- Home inspection fee: The fee charged by a professional inspector to evaluate the condition of the property.
- Pest inspection fee: The fee charged by a professional inspector to evaluate the condition of the property for pests.
- Agent commission: The fee paid to the real estate agent representing the buyer and/or the seller.
Keep in mind that the fees may vary based on the purchase and sale agreement and who agreed to pay what fees. Some people confuse the three day Truth in Lending statement as the settlement statement. TIL disclosures are different. You can learn about Truth-in-Lending (TIL's).