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Old 05-10-2012, 12:10 PM
 
Location: The Lone Star State!
191 posts, read 341,781 times
Reputation: 87

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Hello,

I am very new to the short sale process. My cousin is trying to buy a short sale property in Texas and I am his real estate agent. I would like to help him out by giving him my total commission as closing cost credit. Can I do this? And if so, when and how do I do this? Do I have to write an addendum or can I wait till the bank responds with the accepted offer?? When and how do I assure that my buyer (my cousin) receives this closing cost credit? Please help!!!!
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Old 05-10-2012, 02:11 PM
 
Location: Martinsville, NJ
6,159 posts, read 10,893,123 times
Reputation: 3939
Quote:
Originally Posted by Snow-Flake View Post
Hello,

I am very new to the short sale process. My cousin is trying to buy a short sale property in Texas and I am his real estate agent. I would like to help him out by giving him my total commission as closing cost credit. Can I do this? And if so, when and how do I do this? Do I have to write an addendum or can I wait till the bank responds with the accepted offer?? When and how do I assure that my buyer (my cousin) receives this closing cost credit? Please help!!!!
Talk to your broker. They will have all the applicable LAWS, as well as the appropriate company POLICIES.
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Old 05-10-2012, 03:11 PM
 
3,404 posts, read 4,138,299 times
Reputation: 2397
Don't know about the state you are in, but here it can be credited to them at closing and documented on the HUD.
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Old 05-10-2012, 03:17 PM
 
Location: The Lone Star State!
191 posts, read 341,781 times
Reputation: 87
In Texas...
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Old 05-10-2012, 03:36 PM
 
Location: DFW - Coppell / Las Colinas
29,922 posts, read 34,526,470 times
Reputation: 35919
No (I believe) the title company needs good funds. I bring a Money order to closing and have them show it as "Realtor Contribution" on the HUD. The commission is due your broker and paid after closing.

Best thing to do is talk to the title company and have them talk to the Lender to OK. They may do it straight from your commission as a credit.
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Old 05-10-2012, 04:02 PM
 
Location: Austin
7,077 posts, read 16,889,211 times
Reputation: 9484
Yes, you can do a buyer's credit on the HUD in Texas. I do it all the time when I get a referral from a licensed agent and the referral is a relative and they want the money given to them. It needs to be approved by the lender if it's an FHA/VA loan, so it has to be part of the contract. A buyer is only allowed so much percentage for closing costs contributions. On a conventional loan, most lenders don't care about it being in writing, but some do. You just put it on your commission breakout from your broker.

I did it when I bought my first and second house as well. The third, we just took it off the price.

I would never bring a Money order or cashier's check for them as then I have to pay taxes on an amount I'm not getting as income. Self employment taxes are ridiculously high.
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Old 05-10-2012, 04:05 PM
 
Location: El Dorado Hills, CA
3,670 posts, read 7,974,554 times
Reputation: 3748
And your broker is an important part of this question. They will probably require some of the commission to be paid to cover their portion of overhead.
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Old 05-10-2012, 04:37 PM
 
Location: Salem, OR
13,741 posts, read 31,556,293 times
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Quote:
Originally Posted by NinaN View Post
And your broker is an important part of this question. They will probably require some of the commission to be paid to cover their portion of overhead.
Yes I would expect that the split/desk fees still need to be paid.
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Old 05-10-2012, 04:39 PM
 
Location: DFW - Coppell / Las Colinas
29,922 posts, read 34,526,470 times
Reputation: 35919
Have you disclosed in our contract that you are related to the Buyer ? I usually do it under our special provisions. Hopefully that's not a problem to the SS lender.
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Old 05-10-2012, 04:41 PM
 
Location: DFW - Coppell / Las Colinas
29,922 posts, read 34,526,470 times
Reputation: 35919
Quote:
Originally Posted by FalconheadWest View Post
I would never bring a Money order or cashier's check for them as then I have to pay taxes on an amount I'm not getting as income. Self employment taxes are ridiculously high.
In this situation, FHW is correct. It's better to never have the income unless you are on some type of plateau system with your Broker.
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