Closing Disclosure (previously the HUD-1)

The Closing Disclosure (CD) statement is prepared by the escrow officer and it calculates the important financial figures for the sales transaction. The previous statement (HUD-1) conforms to the U.S. Department of Housing and Urban Development, hence the name HUD-­1. As a government mandated form, and it’s a key document in our industry.

It shows how much money your buyers must contribute, how much money your sellers are receiving as proceeds, and what expenses are charged to whom. You can also verify your paycheck!

The Closing Disclosure statement can be prepared specifically for the buyer, specifically for the seller, or a combined statement that shows both the buyer's figures and the seller's figures. Each of those 3 versions can be prepared before the close of escrow, called an estimated statement, or at the close of escrow, which is called a final statement.

Once you receive the Closing Disclosure, review it for accuracy and let the escrow officer know if there are any discrepancies that need to be corrected. Also you will need to explain the figures to your seller clients.