Illinois Real Estate Practice Exam

What document would help a buyer understand the costs associated with purchasing a home?

1. Certificate of Title

2. Listing Agreement

3. Home Inspection Report

4. Closing Disclosure

The correct answer is: Closing Disclosure

The Closing Disclosure is an essential document that provides a detailed breakdown of all the costs associated with purchasing a home. It highlights the mortgage terms, monthly payments, and all closing costs, including taxes, insurance, and any other fees the buyer will need to pay at the closing of the transaction. This document is provided to the buyer at least three days before closing, allowing them time to review and understand their financial obligations before finalizing the sale. In contrast, the Certificate of Title confirms the legal ownership of the property but does not outline costs. The Listing Agreement is a contract between the seller and the agent that details the terms under which the property is being sold, but it also does not specify the buyer's financial obligations. The Home Inspection Report focuses on the condition of the property, outlining any repairs needed, but it won’t provide information about costs beyond that scope.