What is the purpose of a closing statement in real estate transactions?

The purpose of a closing statement in real estate transactions is to provide a detailed account of all financial transactions related to the sale. This document is crucial as it itemizes all costs associated with the transaction, including the purchase price, closing costs, fees, prorated expenses, and other financial adjustments that may arise during the real estate process. It ensures transparency between the buyer and seller, allowing both parties to understand the monetary aspects of the deal before the transaction is finalized.

By clearly breaking down these transactions, the closing statement serves as an essential tool for both buyers and sellers to confirm that the agreed-upon financial terms are accurately reflected and understood. This clarity helps to prevent any misunderstandings or disputes, making it a vital component of the closing process.