RULES OF THUMB

Seller credits and debits

Buyer credits and debits

 

Rules of thumb concerning who pays what are customary practices, not legally prescribed.

Seller credits and debits                   

Credits.  Sellers are customarily credited for

  • prepaid items
  • purchase price

Debits. The seller’s debits customarily include

  • prorated property tax
  • documentary stamp tax on deed
  • owner’s title insurance policy
  • deed preparation
  • seller’s attorney fees
  • broker’s commission (if hired by seller)
  • mortgage loan payoff
  • prorated prepaid rent
  • tenant’s security deposits

Buyer credits and debits                   

Credits.  Buyers are customarily credited for

  • prorated property tax
  • earnest money deposit
  • prorated prepaid rent
  • tenant’s security deposits
  • new mortgage loan proceeds

Debits.  The buyer’s debits customarily include:

  • purchase price
  • documentary stamp tax on new note
  • lender’s title insurance policy
  • intangible tax on new mortgage
  • mortgage and note preparation
  • buyer’s attorney fees
  • deed recording
  • mortgage recording