Question 67

Earnest money is credited to the buyer of a property at closing in Illinois.

At closing in Illinois, the buyer is credited with the earnest money they have already paid, which is a portion of the purchase price demonstrating their commitment to the transaction.

A) sale price

The sale price is the total amount agreed upon for the property but is not credited to the buyer specifically at closing. Instead, it represents the overall cost of the property that the buyer is responsible for paying, rather than an advance credit.

B) earnest money

Earnest money is a deposit made by the buyer to show good faith in the transaction. At closing, this amount is credited towards the buyer's final costs, effectively reducing the amount they need to bring to complete the purchase.

C) property taxes paid in advance

Property taxes paid in advance are typically considered a closing cost that may be prorated between the buyer and seller. However, these taxes do not represent a credit to the buyer; rather, they are an obligation that may affect the overall financial arrangement at closing.

D) unused seller's insurance premium

The unused seller's insurance premium is not credited to the buyer at closing. This pertains to the seller's insurance expenses and does not provide any financial benefit to the buyer in the context of closing costs or credits.

Conclusion

Earnest money serves as a significant indicator of the buyer's intent and is credited at closing, reducing the total amount payable. Other options, such as the sale price, property taxes, and unused insurance premiums, do not qualify as credits to the buyer but rather represent different aspects of the financial transaction. Thus, option B is the only correct choice relevant to the buyer's credits at closing in Illinois.