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Barrister
Barrister, Lawyer
Category: Real Estate Law
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Experience:  14 years real estate, Realtor. Landlord 24+ years
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I agreed to this this term in a purchase agreement for a home

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I agreed to this this term in a purchase agreement for a home I sold in Virginia: "Seller agrees to pay $11,500 towards closing costs at the discretion of the buyer." The closing was today (I was out of state and didn't attend the closing) and it was discovered on the HUD statement that the buyer decided to have $500 of work done at the seller's expense. After much protest by my real estate agent, the attorney who had power of attorney signed on my behalf because the lender approved the contract. The buyer's agent didn't declare this cost before the closing and I feel that I was cheated out of $500. Do I have any recourse?
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Barrister replied 1 year ago.
Hello and thank you for using JA! My goal is to provide you with excellent service and help with your legal problem.
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Had the buyer exceeded the agreed on $11,500 towards closing costs?
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What type of work was done?
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Was it repairs that were done or some type of optional improvement?
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Was the attorney there with a POA acting as the agent for the seller?
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Thanks
Barrister
Customer: replied 1 year ago.

The closing costs were $10,531.92.

As the buyer, I agreed to pay $11,500 for new windows. The buyer wanted to have the windows tinted for $500 and I was not aware of this.

 

The closing attorney had power of attorney to sign for the seller and the agent for the seller also attended the closing.

 

The seller's attorney discovered the $500 cost to the seller by reviewing the HUD statement just prior to the closing.


Thanks,

Sharon

 

Just to clarify.....In the Purchase agreement I agreed to pay $11,500 towards closing costs at the discretion of the buyer.

 

AND

 

I also agreed to pay $11,500 for new windows. I just realized that these two points in the agreement were for the same value of $11,500.

Expert:  Barrister replied 1 year ago.
Ok, even though you could have likely refused to pay the extra $500 since it technically wasn't "closing costs", when the attorney holding the POA agreed to it, he would have bound you. When someone is holding a POA for another person, they can take any action that the grantor could take.
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So at this point, the attorney would have bound you by agreeing to the additional amount.
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Technically the attorney should have called you during the closing and at least notified you of the discrepancy. But if he saw the total was still below the $11,500, he likely thought that it was ok since they hadn't exceeded the agreed to amount.
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Thanks.

Barrister

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If you need further help, just reply to me via the “REPLY” button and I will be happy to continue.

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I cannot enter into an attorney client relationship, this is a public forum, and all posts are available for public viewing. There is no duty of confidentiality that attaches to any posts. The information provided is not a substitute for a local attorney’s legal advice.

Customer: replied 1 year ago.

The botXXXXX XXXXXne is....does "Seller agrees to pay $11,500 towards closing costs at the discretion of the buyer" mean that the buyer has the right to spend the difference between the actual closing costs up to the amount of $11,500? And was the buyer's agent trying to pull a fast one by not declaring to the seller's agent that the buyer was rolling $500 of window upgrades into the seller's cost?


 


What does "Seller agrees to pay $11,500 towards closing costs at the discretion of the buyer" mean?


 


Thanks,


Sharon

Expert:  Barrister replied 1 year ago.
does "Seller agrees to pay $11,500 towards closing costs at the discretion of the buyer" mean that the buyer has the right to spend the difference between the actual closing costs up to the amount of $11,500?
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No. It it wasn't a legitimate closing cost, you or your agent could have refused to pay it.
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And was the buyer's agent trying to pull a fast one by not declaring to the seller's agent that the buyer was rolling $500 of window upgrades into the seller's cost?
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Yes, they were trying to use up as much of the $11,500 as they could. But technically, they could have used any money left over up to the $11.5K to buy down the interest rate on the loan or for prepaid insurance or taxes. So they actually left a little money on the table.
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What does "Seller agrees to pay $11,500 towards closing costs at the discretion of the buyer" mean?

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It means that the buyer can allocate that amount towards anything related to closing costs like insurance, taxes, attorney fees, closing fees, deed prep, buying down the interest rate, recording fees, etc.

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Thanks
Barrister
Customer: replied 1 year ago.

and for upgraged windows too?

Expert:  Barrister replied 1 year ago.
Nope, that is what I meant when I said:
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"If it wasn't a legitimate closing cost, you or your agent could have refused to pay it."
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Upgraded windows aren't a closing cost so shouldn't have been included.
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Thanks
Barrister
Barrister, Lawyer
Category: Real Estate Law
Satisfied Customers: 22564
Experience: 14 years real estate, Realtor. Landlord 24+ years
Barrister and 4 other Real Estate Law Specialists are ready to help you
Customer: replied 1 year ago.

Thank you! That's what I was trying to determine from the get go. I felt it was a deceptive and manipulative move the buyer's agent made to get a little "extra" for his client. What a piece of work he is!


 


You have now answered my question.


 


Good night.

Expert:  Barrister replied 1 year ago.
Yes, that is why a seller should always demand to see a copy of the closing statement at least 24 hours before the actual closing so things like this can be pointed out and corrected prior to being at the actual table.
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So yes, they kind of goosed you for an extra $500.
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Thanks
Barrister

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