What is an ALTA? (Video)

What is an ALTA? (Video Transcription)

Hi everyone, my name is George Belleville. I’m a realtor in Maryland, and I’m creating this video for a couple of reasons. One is as a refresher for people who have had a real estate transaction and it’s been a while and they don’t remember the paperwork. And the other is for people who’ve never bought a home before or for newer agents to help them understand what’s called the ALTA or the settlement statement, which is the documentation of all the funds that come into the transaction, how they’re dispersed and spent, and then what’s at the end for each person. So I want to go over that. This might be a little bit long, but it’s good to understand everything that goes into this process and how it’s documented for both parties.

Explanation of ALTA/Settlement Statement:

• At the top of the form, it just has the date and who the parties are. Obviously, we’re not going to show that. And if you notice, you’ll see on one side we have debit and credit to the seller, and on the other side we have debit and credit to the borrower. Credit means give money to them, debit means take money away from them.
• Some of these are the same on both sides, some are different depending on what it is. You’ll see deposits and credits, prorations for taxes, loan payoffs, real estate commissions, new loans, and some other things.
• The sale price is a debit to the borrower and a credit to the seller. Earnest money deposit, seller credit, post-occupancy security deposit, and other items are explained.
• County taxes prorated for the days the seller has paid, loan payoff for the prior owner, and real estate commissions come out of the seller’s funds.
• Loan costs and prepaid interest for the buyer, as well as homeowner’s insurance premium and proration, are outlined.
• Aggregate adjustment, title charges, government recording and transfer charges, and transfer taxes are detailed.
• The ALTA/Settlement Statement gives a comprehensive view of all the money coming in and going out of the transaction for both parties.
• A reminder is given about reviewing the Closing Disclosure (CD) provided by the lender before closing, which includes similar information in a different format.

Conclusion:

• That is the ALTA or closing statement. I hope this has been helpful to you. If you have any questions, our contact info is down below. And have a great day.