Need Advice...How does this sound? - Posted by bob

Posted by bob on October 16, 2003 at 14:04:25:

How do you put this is a contract so that a lender will agree to it?

Need Advice…How does this sound? - Posted by bob

Posted by bob on October 15, 2003 at 17:34:37:

Here’s my deal: I have a 3 unit under contract for $31,000. I plan on living in one of the units. Seller is very motivated due to family situations. Probably will appraise as is between $40k and $50k. I have financing in the form of a first for 80% and a second for 20%. Seller wants to net $31,000 at closing. We set a sales price at $45,000. I agreed to pay all closing costs (mine and his) to sell the idea. I am writing a separate agreement that states that the seller will give me $13,750 after closing to cover my closing costs and put about $8000 in my pocket.

How does this sound? Also, can anyone give me some pertinent language to put in the “side” agreement. I am very adamant about not having this as part of the sales agreement. Rather, this is and agreement between myself and the seller after closing.

Re: Need Advice…How does this sound? - Posted by Andrew

Posted by Andrew on October 15, 2003 at 19:23:32:

2 words… Loan fraud.
I dont know if this would work with the loan company you’re going with, but why not just write it in the contract “seller to give 13,750 for repairs” and collect that nice fat check from escrow without all that side stuff and risk getting screwed by the seller, or screwed by the loan company if they find out what you did, then getting screwed by bubba your cell mate in D block. :stuck_out_tongue:

Re: Need Advice…How does this sound? - Posted by E.Eka

Posted by E.Eka on October 16, 2003 at 17:27:45:

It’s necessarily loan fraud if the loan price is around the appraised value. If the house is worth 45K and you’re asking for a loan for 60K that’s a different story. However the house will appraise for more than the loan. It just so happens that the seller is willing to accept less than what the property is worth.
This happens a lot actually, and most lender know about it. As long as it’s within reason. I’ve seen $5,000 being done before. Normally, I’d come up with an agreement with the seller to give me a refurbishing allowance of $5k at closing, or something like that. I’m sure there are lots of people on this board who’ve seen this before.