Posted by Nate(DC) on January 29, 2002 at 18:32:09:
Or use an Ameridream type program to have the seller legally give you the money.
NT
Cash back from seller at closing - Posted by Greg
Posted by Greg on January 28, 2002 at 16:33:25:
I had a conversation with a mortgage broker about raising the price on a property so that I can get cash back at closing. For example from $80,000 to 85,000 so that the extra $5000 from the mortgage would cover some of the cost of purchasing the property. He said as long as it can appraises for the extra, you would add an addendum to the contract that would cover this. My question to him was wouldnt this be a red flag to the lender. He told me that the lender only see’s the sales contract, but not the addendum. He said the extra would clear the cost in escrow.
Can someone let me know if this is correct? and if so can I get the wording I would use in the addendum.
Thanks!!
Re: Cash back from seller at closing - Posted by Ed D
Posted by Ed D on January 28, 2002 at 21:46:11:
I’m trying to do the same thing with a 2 family that needs 5-10k of work. I can purchase for 139-142k but it may appraise for 152k. I am going to put up 5% down on owner-occ loan with no points and have seller kick back on my closing costs (approx 4.5K). Now I still need some $$$ to start the repair/upgrades.
Some advice I have got:
Write it up as full price and
Put the extra $$$ in an escrow/repair account.
Have the seller give you a check after the deal (not very legal).
Put in for paint and carpet upgrades (bad color and no time to fix) so that the lender doesn’t think that the property is in disrepair. (get a check at close).
Re: Cash back from seller at closing - Posted by Ben (NJ)
Posted by Ben (NJ) on January 28, 2002 at 16:53:45:
I recently sold a property where the buyer asked the same thing. I consulted my attorney who is vanilla pure
about this stuff and she said as long as everything is disclosed in the HUD statement that it would be ok. If I had not been doing a 1031 exchange I may have said no anyway because I would have to pay capital gains taxes on a gain that I am not even getting. I am curious to hear other’s views because it didn’t strike me as kosher although the value of the property definitely exceeded even the higher purchase price.