Massachusetts Real Estate License Practice Test

What type of statements provide a breakdown of costs for buyers in a real estate transaction?

1. Buyer Closing Statements

2. Seller Closing Statements

3. Loan Estimates

4. Property Value Analyses

The correct answer is: Buyer Closing Statements

Buyer Closing Statements are essential documents in a real estate transaction that provide a detailed breakdown of costs and fees associated with the purchase of a property. They typically outline all expenses that a buyer will incur at closing, such as loan fees, appraisal costs, title insurance, and any pre-paid items like property taxes and homeowners insurance. This transparency helps buyers understand their financial obligations and ensures they are aware of what they are paying for as part of the transaction. In contrast, Seller Closing Statements focus on the costs and financial details relevant to the seller, detailing proceeds from the sale after deducting commissions and closing costs. Loan Estimates, while informative regarding loan terms and costs, do not provide a comprehensive view of the total costs incurred at closing. Property Value Analyses assess the value of the property but do not itemize closing costs for buyers. Therefore, the Buyer Closing Statement is specifically designed to detail the financial breakdown buyers need to know during the closing process.