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Richard
Richard, Lawyer
Category: Real Estate Law
Satisfied Customers: 55598
Experience:  32 years of experience as lawyer in Texas. I'm also a Real Estate developer.
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I am seller. If I agree to pay up to $5000 of the buyer's

Customer Question

I am seller. If I agree to pay up to $5000 of the buyer's closing cost and it is TYPICAL for buyers in my area to pay a standard $2000 in earnest, a contract that requires a buyer to only pay $1000 in earnest money would be in the favor or the BUYER as this will increase the likelihood that ALL of the closing costs would fall under the $5000 CAP agreed to. Is this logic correct?
JA: Where is the property located?
Customer: Tyler, Texas
JA: Has any paperwork been filed?
Customer: None
JA: Anything else you want the lawyer to know before I connect you?
Customer: The real estate agent is representing both buyer and seller and has signed disclosure.
Submitted: 4 months ago.
Category: Real Estate Law
Expert:  Richard replied 4 months ago.

Hi! My name is Richard & I will be helping you today! It will take me a few minutes to type a response to your question. Thanks for your patience!

Expert:  Richard replied 4 months ago.

Good afternoon. That would not be correct. These are two separate and distinct concepts. Earnest money is posted to ensure the buyer closes and is forfeited by the buyer if the buyer fails to close without cause. Earnest money is not a closing cost; it simply gets applied to the purchase price when the transaction closes. Closing costs are things such as the cost of the title policy, transfer taxes, attorneys fees, commissions, recording costs, deed stamps, etc.

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