The Buyer's Estimate lists all of the costs and credits associated with the purchase of a home. A title insurance company typically acts as the escrow agent for a residential real estate purchase/sale, and the escrow officer prepares the statement with input for the buyer's lender (if applicable). Once the buyer's deposits and loans have been credited to the escrow, and all the debits added up as well, the estimated balance due from the buyer shows the remaining money needed to close the transaction. The balance due is equal to the remainder of your down payment and all of the closing costs as listed on the estimated settlement statement.
It's Just An Estimate!
It is important to remember that all of the charges in the closing statement are estimates! Things can adjust based upon the actual closing date (namely, tax prorations and accrued interest). Escrow agents can close a transaction with excess funds, but they cannot close a transaction that does not have enough money in escrow to cover all the costs, so escrow agents will generally estimate high and then immediately cut a check to refund any overages after the escrow has closed. The buyer will receive an updated final settlement statement once the transaction has closed along with their refund.
Click Here to use our Buyer Estimate Calculator to obtain an estimate of closing costs for a residential transaction.
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