What is the purpose of a closing statement in a real estate transaction?

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The closing statement is the final accounting at closing. Its purpose is to itemize every debit and credit for the closing and to summarize the funds paid and received, so both sides see exactly what they owe or receive. It shows what the buyer is paying (down payment, loan amount, closing costs, prepaid items, and any prorations) and what the seller is receiving or crediting (proceeds from the sale, payoff of any existing loan, commissions, title fees, and other credits or debits). This clear breakdown ensures the exact amounts are known, funds move correctly, and there are no surprises at closing. It’s not used to record the deed with the county clerk, nor to determine property tax assessments or appraise the property's value, as those are separate steps handled by other processes.