Oregon 30-Hour Real Estate Law Practice Test

What is the main purpose of the Closing Disclosure in a real estate transaction?

1. To provide an estimate of future taxes

2. To summarize the transaction details and costs

3. To enhance buyer negotiation skills

4. To list all previous owners of the property

The correct answer is: To summarize the transaction details and costs

The main purpose of the Closing Disclosure in a real estate transaction is to summarize the transaction details and costs. This document provides a comprehensive breakdown of the final terms of the mortgage, including loan terms, projected payments, and a detailed list of all closing costs. It is designed to give both the buyer and seller a clear understanding of the financial aspects of the transaction before the closing takes place, ensuring that they know what to expect in terms of costs and obligations. By detailing the transaction costs, the Closing Disclosure helps all parties involved to verify that the figures align with their expectations and with the Loan Estimate provided earlier in the process. This aids in transparency and allows for any discrepancies to be addressed prior to the closing meeting, helping to facilitate a smoother transaction.