Definition: The settlement statement is a listing of funds paid by the Buyer and Seller, the distributions of those funds, and the remaining cash that should go to the Seller.
- The settlement statement refers to the Buyer as the "Borrower" because the Buyer is the one taking out a real estate mortgage loan.
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| Below are sections from a settlement statement plus our comments in italics. This example is based on a home selling for $150,000, where the Seller owes a balance of $67,800 on his mortgage loan . |
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| Note: This might be more than you care to know about settlement statements. |
The top of the statement summarizes the amounts the Borrower (Buyer) must pay, and the amount the Seller should receive. In both cases this includes the sales price of the home, plus any personal property, such as furniture, included in the sale.
In the case of the Borrower, the summary includes total settlement charges (closing costs) assessed to the Borrower and detailed on the 2nd page of the statement. |
Summary of Borrower's Transaction |
Summary of Seller’s Transaction |
| Sales Price |
$150,000 |
Sales Price |
$150,000 |
| Personal Property |
0 |
Personal Property |
0 |
| Settlement Charges to Borrower |
$ 1,038 |
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 Taxes and assessments already paid by the Seller are added as adjustments to both the Borrower's (Buyer's) side and the Seller's side. |
| Adjustments for items paid by seller in advance |
Adjustments for items paid by seller in advance |
| Taxes |
$ 425 |
Taxes |
$ 425 |
| Assessments |
$ 0 |
Assessments |
$ 0 |
| Gross Amount Due From Borrower |
$ 151,463 |
Gross Amount Due to Seller |
$ 150,425 |
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| The next two sections list moneys paid on behalf of the Borrower, and moneys to be paid by the Seller at the closing ("Reductions in Amount Due To Seller") |
| Paid By Or In Behalf of Borrower |
Reductions in Amount Due To Seller |
Earnest money deposit
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$ 1,000
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Settlement Charges
(details on back page) |
$ 7,680
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| Principal amount of loan (real estate mortgage) |
$120,000 |
Payoff of first mortgage |
$67,800 |
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Payoff of 2nd mortgage |
$ 0 |
| Taxes and assessments due, but not paid by the Seller, are added to amounts paid by Borrower (because he inherits the liability), and also added as a reduction in amount due to the Seller. |
| Adjustments for items unpaid by Seller |
Adjustments for items unpaid by Seller |
| Taxes |
$ 0 |
Taxes |
$ 0 |
| Assessments |
$ 0 |
Assessments |
$ 0 |
| Total Paid By/For Borrower |
$121,000 |
Total Reduction to Seller $ |
$75,480 |
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| The bottom sections of the statement list total cash due from Borrower (Buyer) and total cash due to the Seller. |
| Cash at Settlement From Borrower |
Cash at Settlement To Seller |
| Gross amount due from Borrower |
$151,463 |
Gross amount due to Seller |
$150,425 |
| Less amounts paid by Borrower |
$121,000 |
Less reductions to Seller |
$75,480 |
| Cash From Borrower |
$ 30,463 |
Cash To Seller |
$74,945 |
| "Cash From Borrower" is the amount of the certified check Buyer must provide at the closing (essentially the "down payment.") |
