Washington State Real Estate Practice Exam

Which document details the financial breakdown at closing for a real estate transaction?

1. Title report

2. Purchase agreement

3. Closing disclosure

4. Home appraisal report

The correct answer is: Closing disclosure

The closing disclosure is the document that provides a detailed financial breakdown at closing for a real estate transaction. It itemizes all the costs and fees associated with the transaction, including the purchase price, loan amounts, commissions, taxes, and other closing costs. This comprehensive summary is crucial for both the buyer and the seller, as it allows them to understand a breakdown of how much money will be exchanged at the closing table and what obligations and financial responsibilities they will assume. In contrast, the title report primarily focuses on the ownership history of the property and any potential liens or encumbrances that may affect the title, rather than providing a financial breakdown. The purchase agreement outlines the terms of the sale, including the purchase price and conditions, but does not specifically detail the closing costs. Lastly, the home appraisal report is an evaluation of the property’s market value, serving a different purpose in the transaction process and not addressing the financial components at closing.