An Illinois purchase contract states that upon mutual release, the earnest money of $15,000.00 will be divided with the seller receiving 60% and the buyer receiving the remaining 40%. The seller's share would also be subject to a $500.00 administrative processing fee deducted from the seller's portion before disbursement. How much would the seller net after the processing fee?
Correct Answer
A) $8,500.00
Step 1: Calculate the seller's 60% share of the $15,000.00 earnest money: $15,000.00 × 0.60 = $9,000.00. Step 2: Deduct the $500.00 administrative processing fee from the seller's share: $9,000.00 − $500.00 = $8,500.00. The seller nets $8,500.00 after the fee deduction.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Consideration is something of value exchanged between parties to a contract, making the agreement legally binding. It can be money, a promise to act, a promise to refrain from acting, or anything else of value.
Contingencies are conditions written into a real estate contract that must be met before the transaction can close. If a contingency is not satisfied, the buyer can typically cancel the contract without penalty.
Contract termination occurs when a contract is ended or discharged, releasing both parties from their obligations. A contract can be terminated through performance, mutual agreement, operation of law, or breach.
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