An Ohio buyer submits $10,000 in earnest money for a property listed at $400,000. The transaction closes at $380,000 after negotiation. Under Ohio closing practice, how is the $10,000 earnest money applied on the buyer's settlement statement?
Correct Answer
C) The full $10,000 is credited to the buyer, reducing the amount the buyer needs to bring to closing
The full $10,000 earnest money deposit is credited to the buyer on the settlement statement, regardless of whether the final purchase price differs from the original offer. The earnest money reduces the total amount the buyer needs to bring to closing.
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Related Topics & Key Terms
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Related Concepts
An appraisal contingency allows the buyer to cancel or renegotiate the contract if the property's appraised value comes in lower than the agreed-upon purchase price. This contingency protects buyers from overpaying.
An assignment of contract transfers one party's rights and obligations under a contract to a third party called the assignee. The original party, known as the assignor, transfers their contractual position to someone who was not originally part of the agreement.
A bilateral contract is an agreement in which both parties exchange promises and are both obligated to perform, while a unilateral contract is one in which only one party makes a promise and the other party is not obligated to act.
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