Knowing what happens behind the scenes in your real estate transaction—and understanding how to read a settlement statement—provides transparency, confidence, and financial awareness in one of the most significant financial transactions of your life. Here’s why it’s valuable:
- Prevents Surprises – Understanding the process helps you anticipate potential issues before they arise, such as title defects, last-minute lender requirements, or unexpected fees.
- Protects Against Fraud – Real estate transactions are a prime target for fraud. Knowing the process helps you recognize red flags, such as wire fraud attempts or unauthorized changes to documents.
- Empowers Negotiation – When you understand the fees and charges on a settlement statement, you can question unnecessary or excessive costs, ensuring you don’t overpay.
- Ensures Accuracy – The settlement statement clearly outlines who is responsible for each cost. Buyers and sellers can see the exact amounts they need to pay or receive, including any credits, prorated taxes. But errors happen. Whether it’s incorrect prorations, duplicate charges, or miscalculated taxes, or fees, knowing how to read a settlement statement allows you to catch mistakes before you close.
- Builds Trust – When you’re informed, you feel more in control, and you can trust that your escrow and title professionals are working in your best interest. It is good practice to review your client’s Escrow Settlement Statement prior to their signing appointment.
- Enhances Future Transactions – If you buy or sell again, your knowledge gives you an advantage, making you a more confident and prepared party in the process.
Read on for more information and/or to register for our upcoming 3 Hour Clock Hour Course” “Escrow Insight to Help Your Closings Go Smoothly” and how to read the settlement state (for once and for all)!
If you have further questions about the process or about line items on the settlement statement, please call Land Title Company’s Escrow Department: 360-692-4033 (Kitsap County) or 360-426-0427 (Mason County).
