HUD-1 Settlement Statement - Seller
What is the HUD-1?
The HUD-1 is a form used by the settlement agent to itemize all charges
imposed upon a borrower and seller for a real estate transaction. It gives
each party a complete list of their incoming and outgoing funds. Fees
associated with the transaction but paid prior to closing are also included
on the HUD. They are normally marked "POC," for Paid Outside
of Closing.
When is the HUD-1 Used?
The statutes of the Real Estate Settlement Procedures Act (RESPA) require
the form be used as the standard real estate settlement form in all transactions
in the United States which involve federally related mortgage loans. It's
used for nearly all transactions that involve a buyer and seller, including
cash closings.
When is the HUD-1 Distributed?
RESPA states you should be given a copy of the HUD-1 at least one day
prior to settlement. In real life, entries may still be coming in a few
hours before closing. Most buyers and sellers study the statement on their
own, with their real estate agent, attorney, and with the settlement agent.
Section 400, Gross Amount Due to Seller
The amounts in this section are added to the seller's funds.
Line 401 states the gross sales price of the property.
Entries for personal property (such items as draperies, washer, dryer, outdoor
furniture and decorative items that the seller may be selling to the buyer)
are listed on 402.
Lines 404 and 405 are for other amounts owed by the borrower or previously
paid by the seller, such as:
• If the borrower is assuming the seller's loan, he/she must reimburse the
seller for the balance in the seller's escrow account.
• The buyer may owe the seller a portion of uncollected rents.
Lines 406 through 412 are for items which the Seller has paid in advance.
For instance, the buyer may need to reimburse the seller for a prorated
portion of county taxes if the seller paid an annual bill but will not own
the property during that entire year.
Line 420 is the gross amount due to the seller. It is the total of Lines
401 through 412.
Section 500, Reductions in Amount Due to Seller
The amounts in this section are subtracted from the seller's funds.
Line 501 is used when the seller's real estate broker or another party holds
the borrower's earnest money deposit, and will pay it directly to the seller.
Line 502 contains the figure from Line 1400, the seller's total charges
as computed in Section L.
Line 503 is used if the borrower is assuming or taking title subject to
existing liens which are deducted from the sales price.
Lines 504 and 505 are for any first and/or second loans which will be paid-off
as part of settlement (including accrued interest).
Lines 506 through 509 are shown as blank lines for miscellaneous entries.
Line 506 is used to record deposits paid by the borrower to the seller or
another party who is not the settlement agent. This is slightly different
than the entry in 501. In this case the party holding the funds transfers
it to the settlement agent to be disbursed at closing.
These lines may also be used to list additional liens which much be paid
at settlement to clear title to the property.
Lines 510 through 519 are for bills which the seller has not yet paid, but
owes all or a portion of. Taxes and assessments are listed, but the area
might also include rent collected in advance by the seller for a period
extending beyond the settlement date.
Line 520 is the total for all items in Section 500. The total is deducted
from the seller's proceeds.
Section 600, Cash at Settlement To/From Seller
Lines 601 is the gross amount due to the seller, from line 420.
Line 602 contains the total of reductions in seller's proceeds, from line
520.
Line 603 is the difference between lines 601 and 602. It usually indicates
a cash amount paid to seller, but it's possible for the seller to owe money
at closing. For instance, the seller might owe more on first and second
mortgages than is recovered in the contract.