An ALTA settlement statement is an itemized accounting of every dollar that changes hands at a real estate closing, laid out as debits and credits for the buyer and the seller on a single form. The American Land Title Association created it, and title and settlement companies use it to show exactly where the money goes: purchase price, loan payoff, prorations, title fees, commissions, government charges, and the final cash to close or net proceeds. In a financed deal it sits alongside the lender’s Closing Disclosure. In an all-cash purchase, it is usually the primary financial record of the transaction.1American Land Title Association. ALTA Settlement Statements
How It Differs From the Closing Disclosure
These are two different forms, and buyers often assume they’re duplicates. The Closing Disclosure is a federal form the lender must deliver at least three business days before a financed closing, and it focuses on the borrower’s loan terms, projected monthly payment, and closing costs from the buyer’s side only.2Consumer Financial Protection Bureau. What Should I Do if I Do Not Get a Closing Disclosure Three Days Before My Mortgage Closing? The ALTA statement covers both sides of the transaction and includes detail the Closing Disclosure leaves out, including disbursement dates, recording dates, and tax payoff dates.
Title insurance is where the two forms diverge most visibly. In most states, the Closing Disclosure uses a mandatory federal calculation method for simultaneous-issue policies that produces an inaccurate number. The ALTA statement shows the actual premium paid. When both forms are used at the same closing, the totals must match, but the ALTA statement fills in the detail the federal form glosses over. It supplements the Closing Disclosure, it does not replace it.1American Land Title Association. ALTA Settlement Statements
The Four Versions
ALTA publishes four versions, and which one you see depends on the transaction:1American Land Title Association. ALTA Settlement Statements
- The Combined statement shows the buyer’s and seller’s figures on one form. This is what most people picture when they hear “ALTA statement.”
- The Borrower-Buyer version covers only the buyer’s side and is typically used alongside a lender’s Closing Disclosure in financed purchases.
- The Seller version covers only the seller’s side: payoffs, commissions, prorations credited to the buyer, and net proceeds.
- The Cash version is built for transactions with no lender, where no Closing Disclosure is required. In an all-cash purchase, this is often the only closing document itemizing costs.
How to Read the Columns
The layout follows a simple visual logic. Separate columns handle debits and credits, split between the buyer and the seller. A debit is money going out, a cost you owe. A credit is money coming in, a deposit you already made or a proration working in your favor. Headers at the top identify the settlement date, the property address, and the names of every party and entity involved.
Each section lists line items in a logical sequence. The buyer’s charges usually start with the purchase price, then move through loan costs, title fees, prepaid items, and government charges. The seller’s section starts with the sale proceeds and subtracts payoffs, commissions, and transfer costs. Reconciliation lines at the bottom calculate the buyer’s cash needed to close and the seller’s net proceeds. When the math works, every dollar disbursed ties back to a line item on the statement. If something doesn’t add up, that discrepancy is exactly what the form is designed to surface before anyone signs.
What Shows Up on the Line Items
Building the statement takes more work than it looks. A single transposed digit can delay a closing by days, so the settlement agent gathers and verifies a stack of records and translates them into precise line items.
Mortgage Payoffs and Per Diem Interest
The settlement agent requests a payoff letter from the seller’s existing lender to determine the exact balance needed to release the mortgage lien. Payoff letters include a daily interest charge, called per diem interest, that accrues each day between the statement date and the actual payoff. A seller whose letter quotes a balance as of Monday will owe additional per diem if closing slips to Wednesday. On the buyer’s side, per diem interest covers the gap between the closing date and the start of the first full mortgage billing cycle. It appears as a prepaid item.
Prorated Expenses
Property taxes are the most common proration. The settlement agent splits the annual tax bill based on which party owns the property on each day of the tax year, then credits or debits accordingly. Homeowner association dues get the same treatment. Less obvious prorations include heating fuel left in a tank at closing, where the buyer reimburses the seller for whatever oil or propane remains, and special assessments or municipal charges that straddle the ownership transfer date.
Title Insurance, Commissions, and Government Charges
Title insurance premiums are a one-time cost that varies widely by state. Nationally, owner’s title insurance runs roughly 0.5 percent to 1 percent of the purchase price, though some states regulate rates tightly enough to produce dramatically lower figures. The ALTA statement shows the actual premium rather than the federally calculated figure on the Closing Disclosure.
Real estate agent commissions appear as a seller-side debit. Since the 2024 industry settlement that changed how buyer-agent compensation is negotiated, commission structures have become more variable, though the combined rate for both agents still averages in the low-to-mid 5 percent range on most transactions. Recording fees charged by the county to file the deed and mortgage documents typically run a few dozen dollars per document. Some states also impose transfer taxes or documentary stamp fees on the sale.
Small Administrative Charges
Smaller line items add up faster than buyers expect. Wire transfer fees for moving funds between banks, courier charges for overnight document delivery, and notary fees for the signing session all appear as pass-through costs. Individually these run anywhere from $15 to $50, but a closing with multiple wires and overnight packages can add a few hundred dollars that weren’t on anyone’s radar during negotiations.
What to Check Before You Sign
The closing table is where the preparation either holds up or falls apart. Read the completed ALTA statement alongside the Closing Disclosure in a financed deal, and compare final numbers against earlier estimates. The common sticking points are prorations that look off, fees that weren’t discussed, and charges that jumped since the loan estimate. This is your last chance to question a number before it becomes final. Once everyone signs, the settlement agent is authorized to disburse funds according to the statement.
Wire Fraud on Closing Day
Closings move large sums by wire, and criminals know it. In 2024 alone, the FBI’s Internet Crime Complaint Center logged over 9,300 complaints about real estate wire fraud, with total losses exceeding $173 million.3FBI Internet Crime Complaint Center. 2024 IC3 Annual Report The scam almost always works the same way. Attackers monitor email chains between buyers and settlement agents, then send a spoofed message with altered wiring instructions shortly before closing. The buyer wires the down payment to the criminal’s account instead of the title company’s.
The defense is simple. Verify wiring instructions by calling your title company or escrow officer at a phone number you already have on file, never one pulled from an email. Legitimate settlement agents do not email updated wire instructions at the last minute. If you receive any message changing the account number, routing number, or bank name, treat it as fraudulent until you confirm otherwise by phone. Once wired funds reach a criminal’s account, recovery is rare.
Fixing Errors After Closing
Mistakes on the statement occasionally surface after the papers are signed. Federal rules allow a practical fix. If an inadvertent or technical error appears on the settlement statement, providing a corrected version to the borrower within 30 calendar days of closing is not treated as a violation.4Office of the Comptroller of the Currency. Real Estate Settlement Procedures Act The same 30-day window applies if settlement charges exceeded estimates by more than the permitted tolerance. The loan originator can cure the violation by reimbursing the borrower for the overage. If you spot a problem on your statement after closing, contact your settlement agent and, if a loan is involved, your lender, and ask for a corrected statement within that 30-day window.