What is a settlement statement?

A settlement statement is a crucial document in real estate transactions, often referred to as a Closing Disclosure. It provides a detailed outline of all final costs and disbursements associated with the transaction, making it an essential tool for both buyers and sellers. This document breaks down all the financial details of the closing process, including the purchase price, loan amounts, closing costs, and any other fees that may be applicable.

It ensures transparency by listing all debits and credits related to both parties, allowing for a clear understanding of what each party is responsible for paying. The settlement statement acts as a final summary that helps both the buyer and seller verify that all terms of the contract have been fulfilled before the transaction is completed, making it a fundamental component of real estate closings.

In contrast, the other options do not accurately represent the function of a settlement statement. A receipt for rent would not encompass the complexities of a real estate transaction's financials, nor would a summary of taxes owed or a statement of a broker's assets provide the comprehensive breakdown needed during the closing process.