The Closing Day Numbers

As a homebuyer, you’ll want to know how big a check to bring to closing. As a seller, you’ll be interested in the size of the check you’ll be getting.

In either case, you probably won’t learn the exact number until a day or two before closing. That’s when you’ll see the HUD Settlement Statement – sometimes just called “the HUD.” It’s a form mandated by the U.S government. It contains all the numbers that determine the final figures.

The starting point, of course, is the sale price. But whether you’re the buyer or seller, there will be additions and deductions. These will determine that all-important bottom line.

Here are some items you may see added to or deducted from the sale price.

If You’re the Buyer


  • Prorations. Property taxes and association fees that the seller has paid in advance.
  • Lender Charges. Items such as origination charges, and fees for an appraisal, credit report, flood certificate, or survey.
  • Mortgage Title Insurance. This guarantees that the lender will have a valid first lien on your home.
  • Escrow Reserves. An amount that assures adequate funds in your escrow account to pay property taxes and insurance as they become due. This is in addition to your monthly escrow payments.
  • Interest. This covers the part of the month before your first regular mortgage payment is due.
  • Recording Fees. Payments to the county register of deeds for filing your deed and mortgage.
  • Settlement Fees. Part of the charges the title company imposes for handling the closing.


  • Earnest Money Deposit. Credit for the deposit you made earlier.
  • Mortgage Proceeds. The money you’re borrowing.
  • Occupancy Charge. Rent the seller owes you if you won’t be getting possession of the home immediately. (The title company or real estate agent may hold this amount in escrow temporarily instead of giving you a credit.)

If You’re the Seller


  • Prorations. Reimbursement for property taxes and association fees that you’ve paid in advance.


  • Commission. Your agent’s fee for finding a buyer.
  • Mortgage Payoff. Money to pay off your mortgage balance, and any home equity loan.
  • Unpaid Property Taxes and Special Assessments. Tax payments that are overdue.
  • Transfer Tax. In Washtenaw County, it’s $8.60 for each $1,000 of the sale price. For example, the tax would be $860 for a home that sells for $100,000.
  • Occupancy Charge. Your rent for staying in possession of the home past the closing date.
  • Home Warranty. Only if you’ve agree to buy a home warranty contract.
  • Owners Title Insurance. This guarantees that the buyer is getting good legal title to the home.
  • Drafting of Deed. Fee for the deed that you’ll be signing to transfer ownership to the buyer.
  • Recording Fee. Payment to the county register of deeds for filing the discharge of your mortgage.
  • Settlement Fees. Part of the charges the title company imposes for handling the closing.

The attorneys at the Ann Arbor law firm of Hamilton, London, & Davis can review the HUD Settlement Statement and other closing documents for you.

Categories: Real Estate Law