Understanding Closing Statements in Real Estate Transactions |

Chapter 14 Closing Statements Objectives: 1. To understand the purpose of a closing statement. 2. To understand debits and credits. The closing statement is a cash accounting of all expenses and receipts involved in a real estate transaction. The closing statement is normally prepared by the closing agent, usually a title company or escrow company. As a real estate professional, we should check the statement before closing for accuracy. The seller will want an idea of how much money they will net from the sale of their house. The real estate licensee should be able to prepare a net sheet for the seller. The buyer will also want to know their total costs to acquire the property. The closing statement is composed of debit and credit columns for the seller and debit and credit columns for the buyer. Debit is an amount that party owes or is charged while a credit is an amount that party receives. Look through chapter 14 in theMastering Real Estate Mathbook and work the additional practice problem on page 234. There is no quiz for chapter 14.