How To Show Fees on Closing Disclosure When Buyer and Seller Split a Closing Cost

We received the following question from an ALTA member:

When a seller is paying a portion of a tolerance-related settlement charge, how are the seller and buyer’s obligations shown on the Closing Disclosure Form?

Example: The Loan Estimate for Title – Settlement Agent Fee in the Services You Can Shop For section C is $502.  The consumer selects a provider who is on the creditor’s list and the final charge is $500.  The purchase contract assigns one-half of the charge to each party.

When the buyer and seller agree to split a closing cost in the sales contract, the settlement agent/attorney would split the fee between the buyer's and seller’s columns on page two of the Closing Disclosure.

The detailed breakdown of closing costs are shown on page two of the new Closing Disclosure. This form includes separate columns for costs that will be paid by the buyer, seller or other third party at or before closing.

The person filling out the Closing Disclosure can assign all or part of any one closing cost among those columns. In the instance where the buyer and seller will equally split the settlement agent's fee, the person filling out the Closing Disclosure would list half the fee in the buyers column and half in the sellers column.