What does 'credit to buyer' and 'credit to seller' mean on a statement of adjustments?

On an Ontario statement of adjustments, a "credit to buyer" is money that reduces the amount the buyer has to pay at closing. A "credit to seller" is money that increases the net amount the seller receives. The terminology can feel counterintuitive, so it helps to think of it as: who benefits from this line item.

The deposit is a classic example of a credit to the buyer — it has already been paid, so it reduces the balance still owing. Similarly, if the seller has unpaid property taxes, the buyer gets a credit (reducing what the buyer owes, reflecting that the buyer will need to pay those taxes when they come due). On the other side, if the seller has prepaid property taxes beyond the closing date, that is a credit to the seller — the seller gets that prepaid amount back from the buyer.

Lawyers prepare the statement of adjustments so that it nets everything together into a single number: the amount the buyer must pay on closing day to fully satisfy the purchase price and all adjustments. After applying mortgage proceeds and the deposit, what remains is the amount you wire to your lawyer before closing.