SESOS Real Estate: Understanding the Seller's Escrow and Settlement Operations Statement

A Seller's Escrow and Settlement Operations Statement (SESOS) is a critical financial document provided to a seller shortly before the closing of a real estate transaction. It details all the costs, credits, and the final net proceeds the seller will receive from the sale. Understanding your SESOS is essential to avoid surprises and ensure a smooth closing process.

This document, sometimes simply called the seller's closing statement, is prepared by the escrow or title company handling the settlement. It provides a complete breakdown of the financial exchange, itemizing every debit and credit that affects your final payout. Reviewing it carefully allows you to verify the accuracy of commissions, taxes, and other fees.

What Exactly is a SESOS?

The SESOS is a comprehensive financial summary. Its primary purpose is to provide transparency, giving the seller a clear picture of the transaction's financial outcome before they sign the final paperwork. You will typically receive this document for review a day or two before the scheduled closing. The first page often highlights the final net proceeds, which is the amount you will walk away with after all obligations are settled.

The statement is divided into two main sections: credits and debits. The credit section lists all the money coming to you from the sale, most notably the agreed-upon sale price of the property. The debit section itemizes all the costs and payments being deducted from those proceeds. These can include real estate agent commissions, payoff of your existing mortgage, and prorated property taxes.

Key Components of a Seller's Escrow Statement

A typical SESOS will include several standard line items. Being familiar with them will make your review much more efficient.

• Sale Price: This is the gross amount the buyer is paying for the property. It is the starting point for all calculations.
• Seller Concessions: If you agreed to contribute money toward the buyer's closing costs, this amount will be deducted from the sale price.
• Real Estate Commission: The total commission owed to both the listing and buyer's agents, calculated as a percentage of the sale price.
• Mortgage Payoff: The exact amount required to pay off the remainder of your existing home loan, including any prepayment penalties.
• Prorated Property Taxes: Property taxes are often paid in arrears. The statement will show a credit or debit based on your share of the annual tax bill for the portion of the year you owned the home.

Other common debits include title insurance fees, recording fees for the deed, and any required repairs or inspections you agreed to cover. The statement will also account for your earnest money deposit, which is typically credited back to you at closing.

How to Review Your Statement for Accuracy

Receiving the SESOS is not a passive exercise. It requires a careful, line-by-line review to ensure everything aligns with your contract and prior agreements.

1. Verify the Sale Price and Concessions: Confirm that the sale price matches the figure in your purchase agreement. Check that any seller concessions are accurately listed.
2. Check Commission Calculations: Ensure the real estate commission percentage is correct and applied to the right sale price.
3. Scrutinize the Mortgage Payoff: Compare the payoff amount listed on the SESOS with the most recent statement from your lender. Even a small discrepancy can significantly impact your net proceeds.
4. Review Prorations: Confirm that the calculations for property taxes, HOA fees, and rental income (if applicable) are fair and accurate based on the closing date.

If you find any discrepancies, contact your real estate agent and the escrow officer immediately. Do not wait until the closing table to raise questions, as resolving issues can take time and potentially delay the settlement.

The Final Step: Receiving Your Proceeds

Once you have reviewed and approved the SESOS, and all parties have signed the closing documents, the transaction is complete. The escrow company will then disburse the funds. Your net proceeds are typically wired directly to your bank account on the day of closing or the following business day. You will receive a final, executed copy of the SESOS for your records, which is crucial for tax purposes.

In summary, the key to a confident closing is a thorough review of your SESOS. Verify all debits and credits, confirm your mortgage payoff, and ensure your net proceeds align with expectations. This document is the definitive financial record of your sale, so understanding it is non-negotiable for a successful transaction.