What item is typically credited to the seller at closing?

The correct item typically credited to the seller at closing is prepaid items. Prepaid items are expenses that have been paid in advance by the seller for periods extending beyond the closing date. This can include property taxes, insurance, and sometimes utilities. Since these costs benefit the buyer after they take possession of the property, they are credited back to the seller at closing to ensure that the buyer is not charged for costs that the seller has already covered.

In contrast, unearned rent refers to rent that a landlord has received in advance for a period during which the tenant has not yet occupied the property. Earnest money is a deposit made by a buyer as a sign of good faith in a transaction, but it usually does not involve a credit to the seller at closing. Tenants' security deposits are funds held by landlords as security against potential damages or unpaid rent and are typically not considered in the transaction between the buyer and seller at closing. Therefore, the nature of prepaid items justifies their role as a credit to the seller, ensuring a fair and equitable closing process.