By James Harotunian

Question: I am buying a house. After the inspection, I negotiated a $7,000 credit. The Realtor said we have to say the credit was toward my “closing costs.” My loan carries low closing costs, though. Now, the seller wants to reduce the amount of the credit. We made a deal for $7,000. Why should I take less?

Answer: The language in your purchase and sale contract will be important in support of your dispute. Look out for two horrible words: “up to.” If your contract says the seller will pay “up to” $7,000, you may be out of luck.

When negotiating a credit on a contract, realtors and lawyers often justify the credit by calling it a “closing cost credit.” Lenders don’t like normal credits. There is opportunity for pricing shenanigans, if credits are allowed without reason. Because most lenders allow a small percent of the sale price to pass as a “closing cost credit” the terms is often used.

If your language contains “up to” as a qualifier, your seller is rooting for your closing costs to be low. They only formally agreed to pay the closing cost total. If the total is less than $7,000, the seller is usually off the hook.

Also look at the contract for its definition of “closing costs.” Contract language often defines the credit to be used for “lender costs, escrows, prepaid items, and attorney fees.” When these items are included, you can usually soak up the full $7,000.

I imagine your attorney will gladly charge whatever is necessary to use the extra credit money. Make the argument that your closing costs should include these items regardless of the language you used.

Attorney James Haroutunian practices real estate law, including estate planning. Contact him at with questions or at the Haroutunian Law Office at 630 Boston Road, Billerica, 978-671-0711 or email at