What is the primary purpose of a closing statement in a real estate transaction?

The primary purpose of a closing statement in a real estate transaction is to summarize the expenses and credits associated with the transaction. This document provides a detailed breakdown of the financial aspects involved, including closing costs, deposits, and any adjustments made for items such as property taxes or rent. It ensures that both parties have a clear understanding of what they are responsible for financially, and it helps to ensure transparency in the transaction process.

The closing statement serves as a financial summary that outlines all costs and credits that both the buyer and the seller encountered during the transaction, leading to a final figure that reflects the net funds to be transferred. This is essential for accurate accounting and record-keeping and is an important step in protecting the interests of both parties involved in the real estate deal.