What is the primary purpose of the closing disclosure?

The primary purpose of the closing disclosure is to outline transaction costs. This document is essential in real estate transactions as it provides a detailed breakdown of the financial aspects involved in the sale or purchase of a property. It includes information such as loan terms, monthly payments, and all closing costs associated with the transaction, like fees for services and taxes.

By clearly laying out these costs, the closing disclosure helps buyers and sellers understand the final financial obligations associated with their agreement. This transparency is crucial for ensuring informed decision-making and can help prevent misunderstandings or disputes at closing.

In contrast, property value is typically assessed separately from the closing disclosure, making it a distinct concept. Property damages relate more to inspections and negotiations prior to closing rather than the closing process itself. Negotiating sale terms occurs well before a closing disclosure is presented, which means that it does not pertain to the primary function of this document.