Every real estate closing done at a law-abiding title company will include the settlement statement. This two page document is required by the Real Estate Settlement Procedures Act (RESPA), a program administered by the U.S. Department of Housing & Urban Development. It is a standard form that itemizes all charges for the parties involved.
I’ve had two closings in the past two business days, one as a seller and one as a buyer. As a seasoned investor, I am now quite familiar with the columns and numbers on the settlement statement, and it is easy for me to understand. But it hasn’t always been that way. I remember trying to follow along as the closing attorney would quickly flip between the two pages cross referencing different charges, pointing at real estate commissions, government recording fees, and the prorated county taxes. It is a lot of information to take in for the average buyer or seller. And when thousands of dollars are involved, it is important to know how to read and understand the settlement statement. (Warning: This is by far the nerdiest and potentially most boring thing I have ever written about. Proceed with caution.)