What does a "double entry" indicate on a closing disclosure statement?

A "double entry" on a closing disclosure statement indicates a situation where a transaction is recorded as both a debit and a credit to balance the financial aspects of the closing. Specifically, this means that for every charge incurred by one party, there is a corresponding credit to another party.

In the context of real estate transactions, if there is a debit to the seller (indicating a financial obligation or expense) and a simultaneous credit to the buyer (representing a financial benefit or payment made by the buyer), this balanced entry reflects the transfer of funds or financial responsibilities between the two parties involved in the transaction.

Understanding this concept is crucial, as it ensures that all financial elements are properly accounted for in the closing process. It highlights that any amount owed by one party is offset by an equivalent amount owed to the other party, maintaining the integrity of the financial documentation involved in the sale of a property.