In the context of a real estate transaction, what does the term “debit” typically refer to?

In real estate transactions, the term “debit” refers to an expense or cost associated with the transaction, which is reflected in the closing statement. It is important to understand that a debit can encompass various costs that either the buyer or the seller may incur during the process, such as expenses for inspections, title searches, or any necessary repairs that need to be addressed.

During the closing process, these costs are typically documented to ensure that all parties are aware of the financial obligations they are responsible for. Understanding how debits work is essential for both buyers and sellers as it impacts the final amounts they will receive or pay at the closing table.