RULES OF THUMB
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
