In every real estate transaction, there is a final accounting of who pays what and who receives what. That accounting is documented on a settlement statement—also called a closing statement. The two terms refer to the same document; which one is used often depends on regional preference or local custom.
What Is a Settlement Statement?
A settlement statement is a detailed document prepared for a real estate closing that itemizes every financial aspect of the transaction. It shows the purchase price, earnest money deposits, loan payoffs, prorated taxes, title insurance premiums, recording fees, commissions, and any other charges or credits that apply to the buyer and seller.
The purpose of a settlement statement is to give all parties a clear, complete picture of where every dollar goes—so that the buyer knows exactly how much cash is needed to close, and the seller knows exactly how much they will net from the sale.
Settlement Statement vs. Closing Statement
There is no legal or practical difference between a settlement statement and a closing statement. They are the same document. In some parts of the country, the term “settlement statement” is more common, while in others, “closing statement” is the preferred term. Both describe the final financial summary of a real estate transaction.
Settlement Statements vs. the HUD-1 and TRID Closing Disclosure
Before 2015, most residential transactions that involved federally regulated mortgage lending used the HUD-1 Settlement Statement—a government-prescribed form. In 2015, the TRID (TILA-RESPA Integrated Disclosure) rules replaced the HUD-1 with a new Closing Disclosure form for most consumer mortgage transactions.
However, many real estate closings are not subject to TRID. Cash transactions, commercial real estate deals, and transactions that do not involve a federally regulated mortgage lender typically use a non-TRID settlement statement. These closing statements are prepared by the title company, attorney, or closing agent and can follow any format—which is exactly where clarity and design matter most.
What Is Included in a Settlement Statement?
While the format varies, settlement statements and closing statements generally include:
- Purchase price and deposit: The agreed sale price and any earnest money already paid by the buyer.
- Prorations: Property taxes, HOA dues, rents, and other recurring charges split between buyer and seller based on the closing date.
- Closing costs: Title insurance, recording fees, documentary stamps, transfer taxes, and other transaction-related expenses.
- Loan information: Existing mortgage payoffs for the seller and any new financing for the buyer.
- Credits and adjustments: Repair credits, seller concessions, or other negotiated adjustments.
- Net proceeds and cash due: The bottom line—how much the seller receives and how much the buyer needs to bring to closing.
Who Prepares Settlement Statements?
Settlement statements and closing statements are typically prepared by the closing agent—which may be a title company, a real estate attorney, or an escrow officer, depending on the state and the nature of the transaction. In commercial real estate, the parties’ attorneys often prepare or review the closing statement as well.
Why Clarity Matters
Traditional settlement statement formats were designed decades ago, primarily for accountants. They often mix the purchase price with closing expenses, use confusing running totals, and present information in a way that makes it difficult for buyers and sellers to understand their own transaction.
A well-designed settlement statement separates the price from the charges, balances buyer and seller columns clearly, and presents the net cash due in a way that anyone can understand at a glance. When buyers and sellers can read and verify their own closing statement, it builds trust and reduces questions at the closing table.
Real Estate Settlement Software and Closing Software
AltaStar | Close is real estate settlement software designed to produce the clearest closing statements available. As real estate closing software built for clarity, it supports both commercial closing statements and residential settlement statements (Non-TRID), with automatic prorations, balanced columns, and an intuitive interface that requires no training.
Whether you need a real estate settlement app for a simple residential sale or a real estate closing app for a complex commercial transaction, AltaStar | Close scales to fit—with continuation pages, saved jurisdiction rates, and instant PDF generation.