Closing statement: Overview, definition, and example
What is a closing statement?
A closing statement is a final summary or conclusion made at the end of a meeting, negotiation, or legal process, summarizing key points, agreements, and next steps. In legal and business contexts, a closing statement can refer to a document that outlines the final financial details and agreements of a transaction, such as in a real estate deal or a business acquisition. It provides a clear record of the conclusion of the process and can include a summary of financial transactions, outstanding obligations, and confirmations.
For example, in a real estate transaction, a closing statement would detail the final sale price, closing costs, and the distribution of funds between the buyer, seller, and other parties.
Why is a closing statement important?
A closing statement is important because it serves as the official summary of a transaction or agreement, ensuring that all parties understand the final terms and conditions. It also helps avoid misunderstandings or disputes by providing a clear, written record of the agreed-upon details. In business transactions, a closing statement is essential for confirming that everything has been settled, payments are made, and all parties are aligned on the outcome.
For SMBs, a closing statement helps bring clarity and closure to deals, whether it’s a contract, financial settlement, or project, and ensures that the final details are properly documented.
Understanding closing statement through an example
Imagine your business is closing a contract with a supplier for the purchase of goods. At the end of the negotiation, you and the supplier agree on the final terms, including the delivery date, price, and payment terms. A closing statement would summarize these key points, ensuring that both parties are clear on the agreement and that no important details are overlooked.
In another example, when selling a property, the closing statement would provide an itemized list of the sale price, taxes, commissions, and any other fees, confirming the final amounts that each party must pay or receive.
An example of a closing statement in action
Here’s how a closing statement might be referenced in a business or legal context:
“At the closing of the transaction, the seller will receive the agreed-upon sale price of $250,000. Closing costs, including taxes, agent fees, and inspection fees, total $5,000 and will be deducted from the sale amount. Both parties acknowledge and agree to the final terms as outlined in this closing statement.”
Conclusion
A closing statement is a crucial summary or final document that outlines the key details and agreements of a transaction or deal, ensuring that all parties are aligned and that the deal is concluded smoothly. For SMBs, providing a clear and accurate closing statement helps maintain transparency, avoid disputes, and ensures that all terms are properly documented and agreed upon.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.