What is the purpose of a real estate settlement sheet?

The purpose of a real estate settlement sheet, also known as a closing statement or HUD-1, is to provide a detailed list of closing costs associated with a real estate transaction. This document outlines the various fees and expenses that both the buyer and seller will incur at closing. It includes itemized charges for items such as loan origination fees, title insurance, recording fees, and any prorated taxes or homeowner association dues.

Providing a clear breakdown of these costs helps all parties involved understand their financial obligations and ensures transparency in the transaction. It also serves as an important tool for lenders and title companies to confirm that funds are accurately disbursed, maintaining compliance with regulations and contractual agreements.

The other options, while relevant to real estate transactions, do not describe the specific purpose of a settlement sheet. It does not list potential buyers, establish market value, or record ownership history; rather, its primary function is to ensure that all financial aspects related to the closing are clearly documented and agreed upon by both parties.