Items that affect only one party will be shown as a debit or a credit only on the statement of the party affected. For example, if the sales commission is paid by the seller, the amount will appear only on the seller's closing statement. If the buyer pays for a survey, it will appear on the buyer's statement only.
Items of value that are sold, exchanged, or transferred between buyer and seller will be shown in opposite columns of both parties. For example, the transferred property is shown as a credit to the seller and as debit to the buyer. Never should an item transferred, exchanged, or taken over be shown as a credit to both parties or as a debit to both. If an item is transferred, sold, or exchanged, it will be a debit to one party and a credit to the other.
When selling your home you may ask the person responsible for closing to allow you to review the figures a day or two prior to closing. If any amount does not appear correct or you have questions concerning charges, get the problem resolved then. It is awkward to resolve matters at the last minute.
Items credited or debited can vary dramatically, depending on region.
Items Likely To Be Debited Items Likely be Credited To
From Buyers At Closing. Buyer At Closing.
1. Purchase price of real property 1. Earnest money deposits
2.Purchase price of personal property 2. Proceeds of loan the buyer borrows
3. Deed recording fees 3. Assumption of loan
4. Title examination 4. Mortgage to the seller purchase money
5. Title Insurance 5. Current taxes unpaid to closing
6. Hazard Insurance 6. Tenant rents paid in advance
7. Survey 7. Balance due from purchase to
8. Appraisal fee (sometimes charged to seller) close (paid by buyers to close)
9. Prepaid taxes
10. Loan assumption fees
Items Likely to Be Debited Items Usually Credited
To Seller Are: To Seller Are:
1. Sales Commission 1. Sales price of real property
2. Current but unpaid taxes 2. Sales price of personal property
3. Existing debt-whether assumed or to be paid 3. Prepaid taxes
4. Loan prepayment penalties 4. Prepaid insurance (only if policy is 5. Discount points for buyer's VA or FHA. assumed by buyer)
Discount points on conventional loans 5. Escrow balance held by lender
may be charged to buyer or to seller depending
on contractual arrangements, custom in the area,
local law, etc.
6. Rent received in advance
7. Deed Preparation
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