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Home Selling: Clear to Close

Posted by Sarah Steen on April 23, 2020
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Home selling clear to close

“Clear to close” means the underwriter has reviewed all documents and determined that all requirements (documents, appraisal, proof of funds, etc.) have been fulfilled. The underwriter gives the stamp of lending approval to the buyer and the “clear to close”.

The next step is for the loan officer and settlement agent (your title officer) to produce the lender’s closure disclosure.

Related Reading: Steps to Sell a Home

What is a settlement statement?

The settlement statement will itemize and balance all credits and charges from all parties involved. This will include purchase price, earnest money, any credits to buyer or seller, lender and title company charges, and all loan charges (for the buyer).

You will most likely see this document in various forms at least 3 times:

  • The lender’s settlement statement is referred to as a closing disclosure or CD. It is usually about 3 sheets long. The CD comes from the buyer’s lender, but it can affect you as a seller if it is not delivered to the buyer and signed by the buyer at least 3 days before closing. If there is a delay in this process it could postpone the closing date. You will not see the CD until the day of closing because it is a form for the buyer produced by their lender.
  • The ALTA Settlement Statement is required by the Real Estate Commission. It is usually one page per seller and buyer and lists all charges in a debit and credit column.
  • The closing entity (in Colorado this is usually is a title company) has then their own settlement statement and it looks very similar to the ALTA Settlement Statement. The title company will send us a final settlement statement as soon as it’s assembled. We will review the statement to make sure that all charges are accurate and comply with the Contract to Buy and Sell and all the amendments that go along with this contract and the transaction.

When will the settlement statement be ready?

Our team has seen settlement statements issued as early as a week prior to closing and as late as the time of closing. Receiving the settlement statement at the closing table creates a lot of stress and frustrations among all parties, but most of the time it is a lender issue.

Important Note: Certain changes in the CD will trigger a new 3 day waiting period.

Sellers Settlement Statement

The Seller’s statement is usually much shorter than the buyer’s settlement statement.

What are common credits on a Sellers Settlement Statement?

1. Purchase price
2. Earnest money
3. Any kind of prorations (for example: contracts that are being taken over by the buyer)
4. HOA working capital credits
5. HOA premain

What are common charges on a Sellers Settlement Statement?

1. Title closing fee between $300-400
2. Owners title insurance (most contracts)
3. Title owners extended coverage (most contracts)
4. Commissions for agents
5. Any utility charges
6. Any credits for repairs to the buyers or other agreements
7. Any prorated taxes for this current year
8. Paying off your loan and other liens
9. HOA Status letter (You will be charged twice if you have two separate HOA’s)
10. HOA transfer fees (This varies depending on your HOA)
11. Any mail out charges
12. Any wire charges for pay offs or for wiring your proceeds

Our team is here for you for every step of the home selling process. Email susanna@co-regroup.com or call 719-321-0800.