There may be a number of notices, disclosure, affidavits and other documents that you may be asked to sign at closing. Some may be required by the title insurance underwriter and some may be required by state or Federal law. Settlement of a Real Estate purchase is a legal process, so specific procedures and requirements will vary according to state and local laws. Each of these documents is important and may have legal consequences. Some provide for criminal penalties for false information. Be sure to read each document carefully, as some documents may serve multiple purposes.
The following is a short description of the documents that the Buyer in the transaction will likely have to review and sign at closing:
Settlement Disclosure Statement
Also called the HUD-1 form, HUD-1a, Closing Statement, Settlement Statement, or Settlement sheet. This form is required by Federal law in most mortgage money property purchases and can be used in cash purchases. The statement is prepared by the closing agent. It provides the details of the sale transaction including the sale price, proration of real estate taxes, amounts due to and from buyer and seller and funds due to third parties such as the selling real estate agent. The amount you need to complete the closing is usually on the first page (shown as "Amount Due From Borrower." This amount must be provided in certified funds or wired into the closers settlement account. The statement must be signed by both buyer and seller and becomes a part of the title company's permanent file. Some of your charges on the HUD-1 may have already been paid. These charges will be noted as P.O.C. (paid outside the closing).
Title Affidavit • This is also called a Buyer's Affidavit (or Owner's Affidavit in a refinance transaction) The Title Company issuing the title insurance policy will require you to make certain affirmations regarding title, or ownership, to the property.
Compliance Agreement • This is an agreement signed by the buyer and seller stating that they will cooperate in the event of clerical or typographical errors.
Pennsylvania Choice of Insurance Notice • This is an acknowledgment of notification of your right to select the insurer of your choice in accordance with Section 277.1(c) of Title 40 of the Pennsylvania Statutes.
Purchasers Closing Notice • This is an acknowledgment of notification of the privacy policy of the title company.