ALTA settlement statements may appear confusing at first, but don’t worry, they are much simpler than they appear. Alta settlement statements are specifically designed to organize the property selling process and the post below walks you through each of the four ALTA statements and how to use them.
You’ll learn how these statements provide a thorough breakdown of what charges apply and to which party. This helps both the buyer and the seller better understand how the final costs have been reached and why each of you owes the specific fees.
What is an ALTA Statement?
The ALTA settlement statement is an itemized list of all of the fees or charges that the buyer and seller will pay during the settlement portion of a real estate transaction. Everything from the sale price, loan amounts, school taxes and other pertinent information is contained in this document.
The statements are provided to brokers and agents on both the buying and selling ends of the transaction.
There are Four Types of ALTA Statements.
Because ALTA settlement statements are designed for agents and brokers on both ends of the process, four types are provided. But please note that it is possible to have a combined ALTA Buyer’s or Seller’s statement.
- ALTA Settlement Statement Combined – The Combined settlement is a document that bundles together all transactions as they apply to both the buyer and the seller.
- ALTA Settlement Statement Cash – This is the version used for liquid cash transactions for property sales.
- Settlement Statements – This is the version supplied solely to the buyer and contains only information pertinent to the buyers side of the transaction.
- Seller’s Closing Statement – Throughout the transaction, credits given by the seller and other fees will impact the amount of cash the seller receives. This provides a breakdown off all transactions and how they play into what the seller will make.
The Difference Between Seller & Closing Disclosures, HUD-1 & Alta Statements?
The difference between a seller disclosure and closing disclosure is simple – the seller will receive a seller’s disclosure, which provides a breakdown of costs and fees that factor into the cash they will receive at the transaction’s end.
Due to TRID regulations, agents will have nothing to do with the closing disclosure. The closing disclosure is provided to the buyer and pertains a list of fees and costs and how they work into the buyer’s total expense. It is important to note that only the lender can provide the Closing Disclosure to the buyer 3 days prior to closing? And only the buyer should be able to see it unless they allow the release of it by signing a release disclosure. You should also know that the lender is obligated under the TRID regulations, and the lender can be penalized for failing to disclose 3 days after they’re loan application is approved and again 3 days prior to closing.
A Hud-1 used to be the primary statement associated with real estate and is used to document all cash transactions and how they affect both parties. It is now outdated. The Closing Disclosure was introduced in 2015 as a document that instead contains this information strictly for the buyer. ALTA statements were put into use to provide thorough breakdowns for agents and brokers to receive at the end of the transaction.
Are ALTA Settlement Statements the Same as Net Sheets?
No, an ALTA settlement statement is not the same as the net sale sheet. A net sheet is a document that can be provided throughout the sale process to give the seller an estimate on what they can expect to make. The net sale sheet is not final, and multiple sheets may be provided as offers are made and transactions process. An ALTA settlement statement is provided during the closing of a transaction and contains solid numbers rather than estimates.
Where Can I Download a Sample ALTA Settlement Statement?
You can download a sample ALTA statement by clicking the text link below.
ALTA has developed standardized ALTA settlement statements for title insurance and settlement companies. These sheets help itemize all the fees and charges that both the homebuyer and seller must pay during the settlement process of a housing transaction.
Having a standard form for nearly all title insurance policy transactions maintains that all exchanges of land are done smoothly and efficiently.