Brenda Kellen: Making it through the paperwork |

Brenda Kellen: Making it through the paperwork

Q. How do I read the seller’s settlement statement the title company has prepared for my closing?

A. The statement is the reconciliation of the financial agreement between buyer and seller. It is typically viewed as a final settlement of all charges to both parties. The title company acts as the intermediary for receiving and dispersing funds. The buyer’s lender wires money to the title company for their loan, the title company wires or overnights pay-off’s to the seller’s lien holders and writes checks to other entities on the statement.

The statement begins at the top with the names of both buyer and seller. Confirm the spelling is correct. The property address is described by legal description, followed by the street address. Confirm this is consistent with the property being sold.

The remainder of the statement is similar to a credit/debit accounting worksheet. Review the credit column, checking for the proper sales price; other credits may include propane and water/sewer pro-ration. If any other credits to be paid to the seller were negotiated as part of the contract, those should also appear in this column.

The debit side will include payoff information to lien holders (i.e. mortgage companies). The property taxes for 2008 are pro-rated to the day of closing for the time the seller has owned the property. Taxes are paid in arrears and the taxes paid this last spring covered 2007. If the lender has an escrow account on your loan, expect a refund from this account to arrive via mail within four to six weeks of closing.

In addition, brokerage compensation, title company closing fees, title policy cost and additional seller paid items (i.e. survey cost, inspection credit) are also included on the debit side.

The columns are subtotaled and calculated showing balance due to the seller or balance due from seller.

Consult the contract when reviewing the settlement statement to confirm all financial agreements have been settled. It can be “unsettling” seeing lots of numbers squished together in a strange format. By keeping a copy of the above checklist as a reference will help clear the smoke when in the heat of the moment.

For more insight into the current real estate market, please contact me directly at (970) 485.1115, visit my website at, or e-mail me at I have been working with Omni Real Estate for over 10 years, helping buyers and sellers in both Grand and Summit County.

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