The Settlement Statement
The entire transaction is summarized in the Settlement Statement (HUD-1) prepared by the settlement agent (or closing attorney). For the Buyer, the left column of the first page reconciles the purchase price of the property plus settlement charges, less the earnest money paid and the amount of any loans. A proration of property taxes and assessments and homeowner association dues are added or deducted as appropriate. The total is the amount the Buyer must have to complete the closing.
For the Seller, the right column of the first page reconciles the sales price of the property less settlement charges, payoffs of existing loans, repairs, unpaid utilities, and expenses. A proration of property taxes and assessments and homeowner association dues are added or deducted as appropriate. The total is the net amount due the Seller. The second page of the Settlement Statement itemizes the settlement charges and indicates which party is responsible for payment according to the Residential Sales Agreement.
The settlement charges paid by the Buyer (Borrower) are in the first column and typically include: the loan closing costs (less the portion the Seller may have agreed to pay); prepaid expenses such as the interest adjustment, mortgage insurance premium, and hazard insurance premium; reserves (or escrows) required to be deposited with the lender; title charges including lender's and owner's title insurance; government recording fees and Florida Intangible and Note Doc Stamps; and survey, should the Lender require it, the Buyer request it, and the Seller is not providing it per the Sales Agreement.
The settlement charges paid by the Seller are in the second column and typically include: the Broker's commission; any loan closing costs that the Seller agreed to pay; government recording release fees, the Florida Transfer Tax, and pest inspection if required in the contract. Any items that are listed to the left of these columns and marked POC have already been Paid Outside Closing by either the Buyer or Seller.
The totals of these columns are carried to the first page and listed under settlement charges for the Buyer or Seller as appropriate.
