A seller agrees to a $5,000 concession toward the buyer's closing costs. At closing, the buyer's actual closing costs total only $3,500. Under Ohio agency law and standard closing practice, what happens to the remaining $1,500?
Correct Answer
C) The concession is reduced to $3,500 and the difference is credited back to the seller
Seller concessions are permitted only to offset documented, actual closing costs. When actual costs are less than the negotiated concession, the excess cannot be paid out as cash to the buyer or redirected to other parties. The concession is reduced to match actual costs, and the unused amount reverts to the seller. This reflects both standard Ohio closing practice and lender guidelines governing seller-paid concessions.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An agency relationship created when a principal approves or accepts an agent's previously unauthorized actions, effectively granting authority after the fact.
The legal requirement for real estate agents to inform all parties about who they represent in a transaction, typically provided at first substantive contact.
A legal relationship in which one person (the agent) is authorized to act on behalf of another person (the principal) in business transactions with third parties.
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Buyer's agent Pam represents Ed in Ohio. A home inspection reveals that the property's septic system was installed without the required county permits. The seller states he was unaware of the violation. Ed asks Pam how to proceed. Which response best reflects Pam's obligations under Ohio agency law?
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Under Ohio law, the duty of confidentiality that a buyer's agent owes to the client survives: