How to Read a Settlement Statement: A REALTORS® Guide to the Closing Disclosure

Q: What is a settlement statement in Florida real estate?

A settlement statement is a detailed accounting of all financial transactions in a real estate closing. In financed transactions, the Closing Disclosure (CD) replaced the HUD-1 in 2015 under TRID rules. In cash transactions, the ALTA Settlement Statement is commonly used. Both documents itemize every fee, credit, proration, and disbursement for the buyer and seller.

Q: What should REALTORS check on the Closing Disclosure?

REALTORS should verify: the purchase price matches the contract, the earnest money deposit is correctly credited, the commission amount and split are accurate, prorations for taxes and HOA dues are calculated correctly, documentary stamp taxes and recording fees match Florida rates, title insurance premiums match the rate card, and the seller net proceeds and buyer cash-to-close figures are accurate.

Q: What is the difference between the Closing Disclosure and the ALTA Settlement Statement?

The Closing Disclosure is a federal TRID-required form used in financed transactions. It must be delivered to the borrower at least 3 business days before closing. The ALTA Settlement Statement is used in cash transactions and is not subject to the 3-day delivery rule. Both serve the same purpose: accounting for all money in the transaction.

Q: How do I explain the settlement statement to my client?

Walk your client through five key areas: the purchase price and contract terms (Page 1), the loan terms and projected payments (Page 1 for financed deals), the itemized closing costs broken down by who pays what (Page 2), the prorations and adjustments (Page 2), and the final cash-to-close or net proceeds figure (Page 3). Focus on the bottom line numbers and explain any line items that differ from their expectations.

Quick answer: At a Florida closing you’ll see either a Closing Disclosure (CD) — the federally required TRID form for most financed residential purchases — or an ALTA Settlement Statement, used for cash deals and to itemize each side’s figures. Both lay out the purchase price, loan terms, closing costs, prorations, and the final cash to close (buyer) or net proceeds (seller). Knowing how to read each line helps agents prevent closing-day surprises.

Why REALTORS® Need to Understand Settlement Statements

Your clients trust you to guide them through closing. When they receive a Closing Disclosure or ALTA Settlement Statement filled with line items, fees, and prorations, they look to you for clarity. REALTORS® who can confidently walk a client through the settlement statement build trust, prevent last-minute surprises, and close deals faster.

At Barnes Walker, our title professionals prepare settlement statements for thousands of transactions each year across Southwest Florida. This guide breaks down exactly what you need to know.

Closing Disclosure vs. ALTA Settlement Statement

Closing Disclosure (CD)

Required for all financed transactions under TRID (TILA-RESPA Integrated Disclosure) rules since 2015. The CD replaced the old HUD-1 Settlement Statement and must be delivered to the borrower at least 3 business days before closing. Any material changes restart the 3-day clock.

ALTA Settlement Statement

Used for cash transactions where no lender is involved. Not subject to the 3-day delivery rule, but best practice is to provide it 24-48 hours before closing for review.

Page-by-Page Breakdown: The Closing Disclosure

Page 1: Loan Terms and Transaction Summary

Loan amount, interest rate, monthly payment: Verify these match the buyer's loan estimate
Purchase price: Must match the contract price exactly
Sale price vs. appraised value: Check for discrepancies
Closing date: Confirm it matches the contract

Page 2: Closing Cost Details

This is where most questions arise. Costs are divided into sections:

Section A: Origination charges (lender fees, points)
Section B: Services you cannot shop for (appraisal, credit report)
Section C: Services you can shop for (title search, title insurance, survey, pest inspection)
Section D: Total closing costs
Section E: Taxes and government fees (documentary stamps, recording fees, intangible tax)
Section F: Prepaids (homeowners insurance, property taxes, HOA dues)
Section G: Initial escrow payment

Page 3: Cash to Close / Seller Proceeds

Buyer's cash to close: Total amount the buyer must bring (wire or cashier's check)
Seller's net proceeds: Amount the seller receives after all costs and payoffs
Prorations: Property taxes, HOA dues, and rent adjustments split between buyer and seller based on the closing date

Common Errors REALTORS® Should Catch

Commission errors: Verify the total commission percentage and the split between listing and buyer's agent match the listing agreement
Proration miscalculations: Property taxes should be prorated based on the most recent tax bill. Check the per-diem calculation.
Missing credits: Seller concessions, repair credits, or earnest money deposits not reflected
Wrong doc stamp rate: Florida charges $0.70 per $100 on deeds statewide (plus $0.45 surtax in Miami-Dade). Verify the correct rate is applied.
Title insurance premium errors: Florida promulgated rates are set by statute. The premium should match the rate schedule.
HOA/Condo estoppel fees: Verify the estoppel amount matches the letter from the association

How to Walk Your Client Through the Statement

Focus on five key areas in this order:

Purchase price: "This is what we agreed to in the contract."
Closing costs: "These are the fees for title work, government taxes, and lender charges."
Prorations: "We split the property taxes and HOA dues based on the closing date."
Credits: "Your deposit and any seller credits are applied here."
Bottom line: "This is the final amount you need to bring / will receive."

Frequently Asked Questions

What is a settlement statement in Florida real estate?

A detailed accounting of all financial transactions in a closing. Financed transactions use the Closing Disclosure; cash deals use the ALTA Settlement Statement.

What should REALTORS® check on the Closing Disclosure?

Purchase price, earnest money credit, commission accuracy, tax prorations, doc stamp rates, title insurance premiums, and the final cash-to-close or net proceeds figures.

What is the difference between the Closing Disclosure and the ALTA Statement?

The CD is required for financed transactions with a 3-day delivery rule. The ALTA is used for cash transactions without the delivery mandate.

How do I explain the settlement statement to my client?

Walk through five areas: purchase price, closing costs, prorations, credits, and the bottom-line number.

Need a title partner who prepares clear, accurate settlement statements? Contact Barnes Walker.

Disclaimer: This guide is for educational purposes and does not constitute legal or financial advice. Always verify settlement statement details with your title company or closing attorney.

How to Read a Settlement Statement: A REALTORS® Guide