PSI New Jersey Real Estate State Practice Exam

In real estate, what financial document indicates the final breakdown of all costs and adjustments for a sales transaction?

1. Closing statement

2. Loan estimate

3. Title document

4. Property listing

The correct answer is: Closing statement

The closing statement is a critical financial document in a real estate transaction because it provides a detailed account of all the costs and adjustments related to the sale. This document summarizes the transaction's financial aspects, including the purchase price, closing costs, transfer taxes, and any credits or debits relevant to both the buyer and seller. It is typically presented at closing, the final meeting where ownership is transferred from the seller to the buyer. The closing statement ensures that all parties involved have a clear understanding of the financial obligations and entitlements resulting from the transaction. This clarity is essential for preventing disputes and ensuring that all fees are accurately paid. In contrast, the loan estimate provides an estimate of the costs associated with a mortgage, but it is not specific to the final transaction costs; it is a preliminary document presented prior to closing. Title documents establish ownership and rights related to the property but do not include cost breakdowns. Property listings contain information about the property for sale but do not detail financial transactions or adjustments.