Re: This Brings Up A Good Point - Posted by Zach Acox
Posted by Zach Acox on April 26, 2004 at 10:55:09:
But what about an off-the-books “finder’s fee” or something similar?
I’m doing a short right now with the sellers owing about 176 on a 187 house. The lender is doing the analysis and i will hear from them this week. In this case, the seller is losing out on about $10k if they were to sell it FSBO, almost nothing if realtor.
I know, of course, that for a short to work, the seller must receive ZERO dollars.
My feeling on this is, that i am robbing the seller blind. I know the alternative to my helping out the seller is foreclosure, sheriff’s sale, deficiency judgment, etc. I still have conscience.
What if… I don’t include ANY money to the seller as part of the contract, back end, front end, bottom end, any end. Instead i just simply write a check to seller 30 days (or 60 or 90) after the closing for maybe 2 or 3k, and call it a “finders’ fee” or the like? They get some money out of the bad situation, and i get a little sleep at night. I can even write it off (i think) if i 1099 them.
Ostensibly, it would be to cover a 1099 from their lender, though i know they wont be paying tax on that 1099 because their cost basis in the home is 194 and they are selling it for way under market value.
Any thoughts or experiences would be appreciated.