On a settlement statement, how is an earnest money deposit listed?

In a settlement statement, the earnest money deposit is listed as a credit to the buyer. This reflects the fact that the buyer has already provided this amount as a part of the overall purchase price for the property. The earnest money serves as a good-faith deposit that demonstrates the buyer's commitment to the transaction, and as such, when it comes time to settle, it is credited back towards the buyer’s total closing costs.

Listing the earnest money as a credit ensures transparency in the transaction, showing that this amount is deducted from what the buyer still owes at closing. This practice helps in providing a clear picture of the financial obligations on both sides and ensures that the buyer’s deposit is accounted for correctly in the final settlement figures.