How is the broker's commission displayed on the closing disclosure?

The broker's commission is displayed on the closing disclosure as a debit to the seller and a credit to the buyer. This reflects the financial transaction accurately, as the seller is responsible for paying the commission to the broker, which is typically agreed upon during the listing agreement.

In this scenario, viewing the commission as a debit to the seller indicates that this amount reduces the proceeds they receive from the sale. On the other hand, crediting the buyer represents an acknowledgement that this cost, while paid out by the seller, effectively reflects in the buyer’s transaction, especially when considering the overall funding and negotiations in the sale.

Understanding this structure is crucial, as it outlines the financial responsibilities of both parties. Recognizing that the closing disclosure serves as a transparent financial document to all parties involved in the transaction helps clarify how commissions impact the sale and the net funds disbursed to the seller.