PSI New Jersey Real Estate State Practice Exam 2025 - Free Real Estate License Practice Questions and Study Guide

Question: 1 / 400

What is the purpose of a closing statement?

To provide a summary of the financial transactions at closing

The purpose of a closing statement is to provide a summary of the financial transactions that occur at the closing of a real estate transaction. This document details all the costs associated with the sale, including the purchase price, closing costs, commissions, and adjustments for taxes, utilities, and other prorated items. It ensures transparency and accuracy, allowing both the buyer and seller to understand the financial aspects of the transaction.

The closing statement is crucial as it provides a clear breakdown of who pays what, facilitating a smooth transfer of property and financial obligations. Having a comprehensive summary helps prevent disputes over financial discrepancies after the transaction is completed.

The other options relate to aspects of real estate transactions but do not serve the fundamental purpose of a closing statement. Listing agreements focus on the relationship between a seller and a real estate agent. The verification of identities typically happens during the due diligence and identification processes prior to closing, not within the closing statement itself. Future maintenance agreements, while relevant in certain contexts, do not pertain directly to the financial summary that the closing statement provides.

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To outline the terms of the listing agreement

To verify the identity of the buyer and seller

To outline future maintenance agreements

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