ALTA Settlement Statement Explained for Sellers
The ALTA Settlement Statement is one of the most important documents you'll review before closing because it shows exactly where every dollar in the transaction is going. Learn how to read an ALTA, what charges to review carefully, and why understanding this final financial breakdown can help you avoid surprises on closing day.
What an ALTA Settlement Statement Is
The ALTA Settlement Statement is a standardized closing document used nationwide. It replaces older HUD-style forms and provides a clear, line-by-line breakdown of all financial activity in the transaction.
It is: the final ledger for the sale
It is not: an estimate (that role is served by a net sheet)
It is prepared by: the escrow officer
Sellers typically receive a draft prior to closing and a final version at signing.
When Sellers Receive the ALTA
A preliminary ALTA is usually issued shortly before closing once loan figures, title charges, and payoffs are finalized. The final ALTA is signed at closing.
Reviewing the draft ALTA before signing is strongly recommended so any corrections can be made without delaying funding.
How the ALTA Is Organized
While formatting can vary slightly, most ALTAs follow the same structure.
Section 1: Transaction Summary
Purchase price
Total credits and debits
Seller’s net proceeds
This is the snapshot view. It should align with what you expect based on your accepted offer and negotiations.
Section 2: Seller Credits
Credits increase the seller’s side of the ledger. Common seller credits include:
Purchase price
Prorated rents (if applicable)
Buyer funds credited toward seller payoffs (context-specific)
Section 3: Seller Debits
Debits reduce the seller’s proceeds. Common debits include:
Existing loan payoffs
Real estate commissions
Seller-paid closing costs or concessions
Prorated property taxes
HOA transfer or document fees (if applicable)
Title and escrow fees allocated to the seller
Section 4: Payoffs and Liens
This section itemizes loan payoffs and any liens being cleared at closing. Payoff amounts must match lender statements and are time-sensitive.
Common Items Sellers Should Double-Check
Purchase price: matches the accepted contract
Commission: matches the listing agreement
Concessions: reflect negotiated credits or repairs
Loan payoffs: correct lender and amounts
Tax prorations: accurate based on closing date
HOA fees: only if applicable and agreed
If something looks off, ask before signing. Corrections are much easier prior to funding.
How the ALTA Differs From a Seller Net Sheet
A net sheet is an estimate used for planning. The ALTA is the final, binding accounting.
Net Sheet: early estimate
ALTA: final numbers
Net Sheet: planning tool
ALTA: closing document
Small differences are normal due to interest accrual, final tax prorations, and exact payoff timing.
How This Fits Into the Seller Process
Loan is clear to close
Title figures and payoffs are finalized
Escrow prepares the ALTA
Seller reviews draft ALTA
Corrections (if any) are made
Final ALTA is signed at closing
Want Help Reviewing Your ALTA Before Closing?
The ALTA is where everything becomes final. If you want a second set of eyes to confirm the numbers match what you expect, we’re happy to review it with you before closing day.
FAQ
Can numbers change after I review the draft ALTA?
Minor adjustments can occur (interest, tax prorations), but major changes should be reviewed and explained.
What if I see a charge I don’t recognize?
Ask before signing. The escrow officer can explain or correct it.
Do I have to sign the ALTA to close?
Yes. The ALTA is part of the final closing package.
When do I receive my proceeds?
Proceeds are typically released after documents record and funds are authorized, timing depending on the transaction.