Settlement Statement Review

What the settlement statement is

The settlement statement is the final list of every dollar in the deal: what the buyer pays, what the seller receives, and every cost and credit in between. Title prepares it. Every party signs it at closing. After signing, the money moves exactly as the statement says. If a number is wrong on the statement, the money will be wrong.

You will see three main formats:

Format	Where you see it	What to know
ALTA settlement statement	Most cash investor deals	Shows buyer and seller columns, or separate buyer and seller versions
HUD-1 style statement	Some closing attorneys and older processes	Numbered line sections: 100s and 200s for the buyer, 400s and 500s for the seller, 700s to 1300s for charges
Closing Disclosure	When a buyer uses a consumer home loan (common in Retail Partnership files)	Prepared under federal lending rules. Some changes can restart a 3 business day waiting period, so send corrections early

Older documents and some people still call every statement a "HUD." Use whichever word the title company uses, but know which format you are reading.

When you review

When	Version	Your job
C minus 5	Preliminary (estimate)	Full line by line review, one numbered corrections email to title
C minus 3	Revised	Check every correction was made; send to the client for written approval
C minus 2 to C minus 1	Final	Check again; confirm nothing changed since approval
Closing day	Signed final	Match the fee and disbursements to the approved final

If title has not sent a preliminary statement by C minus 4, call. If it arrives on closing day, Red escalation: you need time to review.

How a statement is built

Every line is a debit (money a party owes) or a credit (money a party receives or has already paid).

• Buyer side: price plus the buyer's costs, minus the buyer's credits (deposit, prorations credited by the seller), equals cash due from buyer.
• Seller side: price plus any seller credits, minus the seller's costs (payoffs, liens, taxes owed, the seller's share of fees), equals cash to seller.

Line by line checklist

Have the contract, every addendum, the assignment or B to C contract, the title commitment and the payoff letters open next to the statement. Check every item. Tick only what you have checked against a source document.

Header

• Seller names exactly as on the deed and contract
• Buyer name exactly as it will appear on the new deed (the end buyer on an assignment)
• Property address and legal description match the commitment
• Settlement agent is the right title company or attorney
• Closing date and disbursement date are correct
• File number matches title's file

Price and deposits

• Contract sales price matches the seller contract (and the latest addendum if the price changed)
• The end buyer's deposit is credited to the end buyer
• The client's own deposit on the seller contract is handled as the assignment agreement says (often refunded to the client or reimbursed by the end buyer at closing)
• No deposit is counted twice, and no deposit is missing

Prorations

• Property taxes are prorated to the right closing date and the right tax year
• The direction is right: if taxes are paid later in arrears, the seller credits the buyer for the seller's share
• HOA dues are prorated and the HOA statement amount is used
• Tenant occupied: the buyer is credited for security deposits held by the seller and for prepaid rent covering days after closing

Seller payoffs and liens

• Each mortgage payoff matches the payoff letter, and the good through date covers the disbursement date (per diem interest added if needed)
• Every lien, judgment, municipal item and code fine on the curative list is either on the statement or was cleared before closing
• Delinquent taxes and penalties are paid from the seller's side
• Nothing appears that you cannot match to the commitment, the contract or a payoff letter

Closing costs

• Each cost is charged to the party the contract says pays it (settlement fee, owner's title policy, transfer tax, recording fees, deed preparation)
• Where the contract is silent, title applied local custom, and the client approves the result
• No duplicate fees (for example, two lien search fees, two courier fees)
• Seller credits and repair credits match a signed addendum
• For Retail Partnership files: commissions match the listing and buyer agency agreements, and any home warranty is on the right side

The client's money

• The assignment fee, double close profit or Retail Partnership spread is on the statement
• The amount matches the signed assignment, B to C contract or partnership agreement, to the cent
• It is payable to the correct entity name
• JV files: each party's share is a separate line and matches the JV agreement
• Transactional funding fees (double close) match the funding agreement

Totals and disbursement

• Cash due from buyer adds up (check it with a calculator, line by line)
• Cash to seller adds up
• Seller's proceeds are what the client expects; any big difference from the estimate shared with the seller is explained before signing
• Wire instructions for the client's fee were confirmed by phone, not taken from email

Worked example: an assignment

Contract price 120,000. Assignment fee 15,000. The contract says the buyer pays the owner's title policy and the seller pays transfer tax. Settlement fee split equally.

Seller side

Line	Amount (USD)
Contract sales price	120,000.00
Less mortgage payoff (through disbursement date)	64,250.18
Less delinquent property taxes and penalties	2,184.40
Less current year tax proration (seller's share, credited to buyer)	1,036.55
Less municipal water lien	312.00
Less seller's half of settlement fee	400.00
Less deed preparation	150.00
Less transfer tax	240.00
Cash to seller	51,426.87

Buyer side

Line	Amount (USD)
Contract sales price	120,000.00
Assignment fee payable to (ASSIGNOR ENTITY NAME)	15,000.00
Buyer's half of settlement fee	400.00
Owner's title policy	875.00
Recording fees	86.00
Lien search	150.00
Less end buyer's deposit	5,000.00
Less tax proration credit from seller	1,036.55
Cash due from buyer	130,474.45

Check: 120,000 plus 15,000 plus 400 plus 875 plus 86 plus 150 equals 136,511.00. Minus 5,000 and 1,036.55 equals 130,474.45. The seller's proceeds are based only on the 120,000 contract price.

How the assignment fee is shown

Title companies handle this in a few accepted ways. Your job is to confirm, at vetting and again at C minus 5, which way this title company uses, and that it matches what the client expects.

Method	How it looks
A line on the buyer side	"Assignment fee to (assignor entity)" as a buyer charge, disbursed to the client at closing
Separate buyer and seller statements	Each party receives the statement for their side; the fee appears on the buyer's statement
Combined statement	Both columns on one page; the fee shows in the buyer column

Rules for every method:

1. The seller's side always reflects the seller's contract price.
2. The fee is labeled honestly as an assignment fee (or as the client's documents describe it). It is never disguised as another kind of charge.
3. Some states require the seller and later buyers to receive disclosures about the wholesale nature of the deal. Follow the client's instructions and title's guidance; never hide anything a law or the contract requires to be shared.
4. If title says it will not show an assignment fee, Red escalation the same day. The client may switch to a double close or another title company.

Double close mechanics

A double close is two transactions. You review two statements.

	Closing 1 (A to B)	Closing 2 (B to C)
Seller	Original seller	The client's entity
Buyer	The client's entity	End buyer
Price	Seller contract price	Resale price
Funding	Transactional lender or client funds (or end buyer funds if title allows)	End buyer's cash or lender
Client's money	Pays price plus costs	Receives resale price minus costs and funding payoff

Example

Seller contract 120,000. Resale to end buyer 138,000. Transactional funding at 2 percent of 120,000 equals 2,400.

• Closing 1: the client's entity buys for 120,000. The transactional lender funds it. Buyer costs on closing 1, for example 1,350.
• Closing 2: the client's entity sells for 138,000. The transactional loan (120,000 plus the 2,400 fee) is repaid from the proceeds. Seller costs on closing 2, for example 1,150.
• Client's profit before other costs: 138,000 minus 120,000 minus 2,400 minus 1,350 minus 1,150 equals 13,100.

Double close checklist

• The client's entity name is identical on both statements
• Closing 1 funds before closing 2 disburses, in the order title confirmed
• The transactional loan payoff and fee on closing 2 match the funding agreement
• Both sets of recording fees and transfer taxes are charged as each contract says
• Title insurance: ask title whether a reissue or discounted rate applies to the second policy
• The end buyer's statement shows only the B to C transaction

Common errors

Error	How it happens	How you catch it
Wrong price	An addendum changed the price and title used the old contract	Compare with the latest signed addendum
Fee missing or wrong amount	The assignment arrived late or was misread	Compare with the signed assignment, to the cent
Fee payable to the wrong entity	The client has several entities	Compare with the entity on the assignment and the W-9 title holds
Deposit not credited	The receipt was logged in a different file	Compare with your deposit receipt
Tax proration backwards or wrong year	Local tax rules are confusing	Ask title to explain the calculation in one line
Expired payoff	Closing moved after the payoff was ordered	Check the good through date
Seller charged a buyer cost	Default settings in title software	Compare each cost to the contract
Duplicate fees	Two people added the same charge	Read every line, do not skim
JV split wrong	Title did not receive the JV agreement	Send the JV agreement on Day 0
Security deposits not credited	Tenant details were never shared	Send the lease and deposit amount at CTC

Approval workflow

1. You review and send corrections to title in one numbered email.
2. Title sends a revised statement. You check every correction.
3. You send the statement to the client with a short summary: price, fee, seller proceeds, anything unusual. You ask for written approval.
4. You walk the seller through their side by phone. Use the word "estimated" until it is final. Answer what you can; send anything else to title.
5. You confirm to title, in writing, that the client has approved, and quote the client's approval.
6. On closing day, you match the signed final statement to the approved version.

Check yourself

1. In the worked example, what is the cash due from the buyer if the assignment fee changes to 12,500?
2. Name three accepted ways title can show an assignment fee, and the one rule that applies to all of them.
3. Why should you add the columns yourself?
4. In a double close, which closing must fund first, and why?
5. A preliminary statement shows the transfer tax on the seller side, but the contract says the buyer pays it. What do you do?

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