All of the following are debits on the buyer's side of the closing statement EXCEPT
Correct Answer
C) the earnest money already held in escrow
On a closing statement a debit is an amount charged to a party, increasing the cash that party must produce, and a credit is an amount already supplied by or owed to that party. The purchase price, the origination fee, and the deed recording fee are all charges the buyer has to fund, so each is a buyer debit. Earnest money is cash the buyer already delivered into escrow, so it appears as a credit that reduces the balance due at closing.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A transfer tax is a tax imposed by state, county, or local government on the transfer of real property from one owner to another. It is typically based on the sale price or a flat rate per dollar of consideration.
An abstract of title is a condensed history of all recorded documents and proceedings that affect the title to a specific parcel of real property. It is a summary, not a guarantee, of title condition.
Actual notice means a person has direct, personal knowledge of a fact or interest in real property. This can come from being told, seeing something firsthand, or any form of direct awareness.
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