Review Closing Disclosure

TLDR: Buyers in Virginia have three days to review the Closing Disclosure, which means you'll have a list of all transaction costs at least three days before closing.

What is the closing disclosure? 

Before you close, the lender (or title company if you’re not getting a loan) will provide you and the buyer with a five page document called a closing disclosure, previously referred to as a HUD-1, which has the breakdown of what funds are owed to and by each party at closing. In Virginia, the buyer is legally permitted three days to review the closing documents and disclosures, at which time you'll also receive the closing disclosure, which will have your payout listed. 

You Can't Have It All (Yet)

The exact amount owed to and from each party depends on myriad factors: prorated taxes, local water companies holding deposits, rental security deposits, prorated utility bills, etc. That said, it can be complicated (or impossible) to calculate precisely what you'll be paid out at closing when utility bills often come out weeks after the month ends. As a result, it's not uncommon for the title company to retain a small amount of your proceeds in escrow until final utilities are paid. 

Fun Fact

In 2015, the closing disclosure replaced the HUD-1 settlement statement as the final document that mortgage borrowers are given before signing closing paperwork. These changes were part of the TILA-RESPA Integrated Disclosure (TRID) rule implemented by the Consumer Finance Protection Bureau, and included a mandate requiring delivery of the closing disclosure at least three business days before closing to prevent surprises at the closing table. Today, closing disclosures for buyers are provided by lenders with the onus on the settlement company to ensure that the seller receives a closing statement.

The Closing Disclosure

This Closing Disclosure Explainer from the Consumer Financial Protection Bureau provides an outstanding explanation of the sections within a closing disclosure.

For quick reference, here are the five pages you’ll see in a closing disclosure.