If the sale price is $200,000, the down payment remains 20%, and earnest money is $5,000 with option money $2,000 credited at closing, what is the down payment due at closing?

If the sale price is $200,000, the down payment remains 20%, and earnest money is $5,000 with option money $2,000 credited at closing, what is the down payment due at closing?

• A. 40,000
• B. 33,000
• C. 37,000
• D. 28,000

Answer: (B)

The down payment is 20% of the sale price, which is 0.20 × 200,000 = 40,000. Earnest money (5,000) and option money (2,000) that are credited at closing reduce the amount you must bring to closing by 7,000. So the down payment due at closing is 40,000 − 7,000 = 33,000.

The down payment is 20% of the sale price, which is 0.20 × 200,000 = 40,000. Earnest money (5,000) and option money (2,000) that are credited at closing reduce the amount you must bring to closing by 7,000. So the down payment due at closing is 40,000 − 7,000 = 33,000.