If a Seller agrees to contribute to the Buyer’s closing costs, how should the amount be documented?

When a Seller agrees to contribute to the Buyer’s closing costs, this agreement is most accurately documented in Paragraph 3, which pertains to the sales price of the property. By adding the closing cost contribution to the sales price, it reflects the total financial obligation for the transaction, indicating that the contribution is essentially offsetting the Buyer's costs while still integrating it into the overall sale price.

This approach clarifies that the contribution is factored into the transaction value, making it easier for all parties involved to understand the financial details surrounding the sale. Documenting it in this way ensures transparency, as lenders and closing agents often look at the agreed-upon sales price when evaluating the transaction.

While there are other sections of the contract that could be used for different types of agreements or disclosures, specifying the contribution directly within the sales price ensures that it is clearly communicated as part of the overall deal structure.