Who is responsible for expenses incurred on the day of closing?

The seller is generally responsible for expenses incurred on the day of closing as part of the sale transaction. This responsibility typically includes costs such as the transfer taxes, any outstanding liens or assessments on the property, and sometimes the commission fees owed to the real estate broker if agreed upon in the sales contract. It is essential for both parties to review the closing statement, as this document itemizes all costs associated with the closing and specifies who is liable for each expense.

In most real estate transactions, the buyer usually incurs costs related to their mortgage financing, such as loan origination fees, appraisal fees, and inspection costs, which may be paid prior to or at closing. Similarly, real estate brokers earn their commission from either the seller or buyer, depending on the agreement but are not accountable for the closing day expenses themselves. Understanding this distribution of financial responsibilities helps clarify the closing process and ensures that both the buyer and seller can prepare adequately for their respective costs.