Oregon 30-Hour Real Estate Law Practice Test

What is typically included in the credits and debits of a closing disclosure?

1. Property details

2. Final payment instructions

3. Loan terms

4. Closing costs and payments

The correct answer is: Closing costs and payments

The inclusion of closing costs and payments in a closing disclosure is crucial because this document serves to inform both the buyer and seller of the financial elements related to the transaction. Closing costs encompass a range of fees, such as title insurance, appraisal fees, and recording fees, which are essential for completing the sale. This comprehensive breakdown allows all parties to understand their financial responsibilities and ensures transparency in the transaction. It's not just about the total amount to be paid; the closing disclosure itemizes each cost, helping buyers to prepare financially and confirming that they are aware of what they are liable for at closing. This clarity is especially important in real estate transactions, where miscommunications or misunderstandings regarding costs can lead to disputes or financial challenges. Property details, final payment instructions, and loan terms, while relevant to the overall real estate transaction, do not specifically relate to the financial breakdown that the closing disclosure is designed to provide. These elements are important but fall outside the primary focus of credits and debits within the closing disclosure.