How to Read a Settlement Statement as a Seller

by Ryan Rose

A few days before closing, you'll receive a settlement statement. It's a dense document full of numbers. Your eyes might glaze over. Don't let them.

This paper tells you exactly how much money you're getting and where every dollar goes. Let's break it down.

What Is a Settlement Statement?

The settlement statement (sometimes called a closing disclosure or HUD-1) is the final accounting of your sale. It lists the sale price, all costs, credits, and adjustments, and shows your net proceeds.

Review it carefully before closing day. Mistakes happen. Better to catch them before you sign.

Key Sections for Sellers

Sale price. The agreed purchase price. This should match your contract.

Payoffs. Your existing mortgage balance, any other liens, and HOA payoff amounts. These come out of your proceeds.

Prorations. Property taxes and HOA dues get divided between you and the buyer based on the closing date. You might owe or receive credit depending on when payments were made.

Commissions. Agent fees, typically listed as a percentage or flat amount. Verify these match your listing agreement.

Title and escrow fees. Title insurance, escrow fees, recording fees, and similar costs.

Credits to buyer. Any credits you agreed to, like closing cost assistance or repair credits. These reduce your proceeds.

Net proceeds. The bottom line. What you actually walk away with.

What to Verify

Check these items carefully:

Sale price is correct. Obvious, but verify it.

Mortgage payoff is accurate. Your lender provided this number. Make sure it matches what's on the statement.

Commission matches agreement. Whatever you agreed to in your listing contract should be reflected here.

Credits match contract. If you agreed to a $5,000 repair credit, make sure it's $5,000, not $6,000.

No surprise fees. Every charge should be explainable. Ask about anything you don't recognize.

Common Seller Costs

Item	Typical Cost
Agent commissions	5-6% of sale price
Title insurance (owner's policy)	$1,500-2,500
Escrow fee	$500-1,000
Transfer tax	~$500
HOA document fees	$200-500
Prorated taxes/HOA	Varies

Ask Questions

If something doesn't make sense, ask. The title company should explain every line item. Your agent should help you understand the numbers.

Don't sign until you're satisfied everything is correct. Once you sign, changing things is much harder.

The Bottom Line

Your settlement statement is the final word on your sale. Review it carefully, verify the numbers, and ask about anything unclear. This is your money.

Questions about closing costs on your Las Vegas home sale? Let's review the numbers together.

Frequently Asked Questions About Reading Settlement Statements for Sellers

Q1: When will I receive my settlement statement?

You'll typically receive your settlement statement 3-5 business days before your scheduled closing date. This gives you time to review all numbers and costs before signing. If you haven't received it within this timeframe, contact your title company or real estate agent immediately.

Q2: What's the difference between a settlement statement and a closing disclosure?

They're essentially the same document with different names. The term "closing disclosure" is the newer, standardized version used since 2015. Some people still refer to it as a settlement statement or HUD-1. All provide the final accounting of your real estate transaction.

Q3: How do I calculate my net proceeds from the sale?

Start with your sale price, then subtract your mortgage payoff, agent commissions, title and escrow fees, transfer taxes, HOA fees, and any credits to the buyer. The remaining amount is your net proceeds. This final number should be clearly listed at the bottom of your settlement statement.

Q4: What are prorations and how do they affect my proceeds?

Prorations divide costs like property taxes and HOA dues between you and the buyer based on the closing date. If you've prepaid taxes for the full year but close in June, you'll receive a credit for the remaining months. If taxes are unpaid, you'll owe your portion through the closing date.

Q5: Can I negotiate who pays for certain closing costs?

Yes, but this negotiation happens during the contract phase, not at closing. Items like title insurance, escrow fees, and transfer taxes can be allocated to either party through negotiation. However, once your purchase agreement is signed, these terms are typically locked in.

Q6: What happens if I find an error on my settlement statement?

Contact your title company or escrow officer immediately. Common errors include incorrect payoff amounts, wrong commission percentages, or duplicated fees. Most errors can be corrected before closing if caught early. Never sign a settlement statement with numbers you believe are incorrect.

Q7: Are seller closing costs tax deductible?

Some costs reduce your taxable capital gains, but they're not direct deductions. Items like agent commissions and transfer taxes typically reduce your net profit from the sale, which can lower your tax liability. Consult with a tax professional to understand which costs apply to your specific situation.

Q8: How much should I expect to pay in total closing costs as a seller in Las Vegas?

Total seller closing costs in Las Vegas typically range from 7-10% of the sale price. The largest portion is usually agent commissions (5-6%), followed by title insurance, escrow fees, transfer taxes, and other miscellaneous costs. On a $400,000 home, expect to pay approximately $28,000-$40,000 in total costs.

Q9: Do I need to bring money to closing, or will I receive a check?

Most sellers receive money at closing, but not always. If your mortgage payoff and closing costs exceed your sale price, you'll need to bring money to close. Your settlement statement will clearly show whether you're receiving proceeds or need to bring funds. You'll know this several days before closing.

Q10: How long after closing will I receive my proceeds?

In most cases, you'll receive your proceeds on the day of closing or within 24-48 hours. The escrow company typically issues funds via wire transfer or cashier's check once all documents are signed and recorded. Wire transfers are faster and more secure than waiting for a physical check.