March 2, 2018
Buying & Selling Tips

Settlement Statements Explained: Buyer

A settlement statement is the statement that summarizes all the fees and charges that both the homebuyer and seller face during the settlement process of a housing transaction. The table below gives further explanation as to what these fees and charges are for both buyer and seller.

Item Item Explanation
Contract Sales Price Debited (charged) to buyer.
Earnest Money Upfront payment for buyers at time of contract. Credit to buyers.
New Loan Amount Amount of buyer’s new loan shown as a credit to the buyer.
Title Insurance Loan Policy Provides the new lender with a title insurance policy on the property; insures their Deed of Trust of being in 1st lien position.
Tax Certificate Reflects status of the property taxes.
Record Warranty Deed Cost to record with the county.
Record Deed of Trust Cost to record new lenders Deed of Trust.
Documentary Fee Charged by the State of Colorado; ($0.01 per $100.00 based on sales price).
Taxes for Current Year Buyer is credited the Seller’s portion of the current year taxes from January 1st to the closing date as taxes are paid in arrears. Based on either prior year taxes or the most recent mill levy and assessed value. This is determined in the real estate contract.
Tax Reserve Required by lender to establish escrow account to pay future taxes on property.
Hazard Insurance Premium One year insurance premium on home.
Hazard Insurance Reserve Required by lender to establish escrow account for future insurance premiums.
Loan Origination Fee Charge from new lender to get the loan to the table; can include a percentage of the loan amount along with miscellaneous lender fees (i.e. Processing, Underwriting, Doc Prep, etc.).
Loan Discount Fee Charge to the buyer; usually buys down the interest rate.
Interest on New Loan Charged to the buyer from the day of closing to the first day of the following month.
Appraisal Fee Cost for home appraisal.
Credit Report Cost for lender to run credit report.
ILC or Survey Charge to Buyer or Seller per contact if ILC or Survey is required.
HOA Transfer and Status Letter Can be paid by Seller, Buyer or split pursuant to the contract. Fee charged by the management company to transfer names and/or to acquire the status letter.
HOA Dues Any Dues up to the day of closing are seller’s responsibility. Buyer will be charged for HOA dues from the day of closing and forward.
Real Estate Closing Fee Fee charged for title company to act as settlement agent for the closing. Typically split 50.50 between Seller and Buyer to the contract.
Loan Closing Fee Charge from title company to prepare the HUD-1 and close the loan side of the transaction on behalf of the new lender.
Seller Concession Closing costs the sellers have agreed to pay on the buyer’s behalf. New lender might limit the amount the buyer can receive.
Debit to seller and credit to buyer.


Click here for our Seller’s Estimated Net Sheets. Contact your local land Title office for more information.