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I assumed that there was no way to legally reinforce a contract by offering the buyer money or property to buy. However, this is a common circumvented practice in many other areas of the business world. Sometimes they call it bribes, which is clearly illegal. Other times they call it finder's fees and all kinds of other ways to get around the law.
The comment about the 20,000K to do the garage cleaning was humor. I'm sorry that the supposed real estate agent could not see the sarcasm, but to make insulting remarks when you disagree with someone is certainly not in good taste nor is it germaine to an otherwise very civil forum.
Finder's fees are actually often illegal. I know in Idaho, we cannot legally pay a finder's fee to a non-licensed person. Our agents CAN gift part or all of their commission to the buyer or seller, legally, though, but from my understanding (I'm not an agent or lender) many loan types will not allow that money to be used for closing or down.
Another perfectly legal way to do it is to offer the buyer a second mortgage, which states in writing that payments to you are secondary to payments to the bank even monthly. As long as the bank holding the primary mortage understands that their mortgage is paid for before yours, they don't really care. And if you offer the buyer the same interest rate that fed is now offering to banks that borrow money then they really are home free with a second mortgage that you really don't expect to be paid and which you are charging a vanishingly small interest. It has to be all legal and above board, but as long as the bank knows that they get all the money first, they generally look at the the seller as a nut case for offering this.
Another perfectly legal way to do it is to offer the buyer a second mortgage, which states in writing that payments to you are secondary to payments to the bank even monthly. As long as the bank holding the primary mortage understands that their mortgage is paid for before yours, they don't really care. And if you offer the buyer the same interest rate that fed is now offering to banks that borrow money then they really are home free with a second mortgage that you really don't expect to be paid and which you are charging a vanishingly small interest. It has to be all legal and above board, but as long as the bank knows that they get all the money first, they generally look at the the seller as a nut case for offering this.
Most investors no longer permit second trust financing held by the seller. It is now considered an inducement to buy. While we use to do this decades ago, generally, it is no longer an accepted practice.
Now, I suspect you could do it after the fact, but the buyer would have to have the cash up front.
I have a situation that brought me to this website...I have a home that needs about $ 20,000 in repairs in which I don't have the money......I need to sell the house desperately due to some huge financial issues.......The VA did an inspection and appraised the house at $ 167,000....I am trying to sell the house for $ 149,000 which is $ 18,000 under market to current value......is there any way to give the buyer money back at closing to help with the repairs.....I guess what I am asking is if I can sell the house for value being $ 167,000.....and give the customer back $ 18,000...can I make a letter for repairs etc....after closing to pay for these repairs????....
I have a situation that brought me to this website...I have a home that needs about $ 20,000 in repairs in which I don't have the money......I need to sell the house desperately due to some huge financial issues.......The VA did an inspection and appraised the house at $ 167,000....I am trying to sell the house for $ 149,000 which is $ 18,000 under market to current value......is there any way to give the buyer money back at closing to help with the repairs.....I guess what I am asking is if I can sell the house for value being $ 167,000.....and give the customer back $ 18,000...can I make a letter for repairs etc....after closing to pay for these repairs????....
You cannot give the Buyers money, but the Buyers can obtain something called a 203K mortgage which let's them purchase the home and leave money in escrow for the repairs. The way it would work it to sell the home for a lower price and have the appraiser identify the value with repairs completed. The difference is what they would use to do the repairs.
So as an example.
Home value with repairs - $167,000
Selling price of home - $150,000
Amount available for repairs $17,000
Buyer would need down Payment of $5845 (3.5% of $167K)
Mortgage of $161,155 (if buyer qualifies)
You (seller) could cover closing costs apprx $5,500
Find a good agent and lender that is familiar with these programs and see if your buyer qualifies.
I have a house that will appraise for a lot more than I'm selling it, so it will pass the bank appraisers. However, since the banks are not willing to lend for people who don't have 20% down, is there any LEGAL WAY to give a buyer the other 10% that they need?
Lowering the cost doesn't really help the buyer who doesn't have the required 20% because you have to lower the property way way down to get to their magic number.
For example(used big easy to figure numbers to make my point): suppose we have a house that we could sell for $200,000 and the appraisers would probably accept that number if the buyer had 20% down. But the buyer only has $20K not $40K, so s/he won't even look at any houses of that number, even though they could easily afford the payments. The seller wold be happy to sell the house at $180K and give the buyer the additional $20K that they need for the bank.
Is there any way to make that happen legally?
Z
ask the buyer to go for FHA loan which need only 3.5% and that money also he can get as gift
or a conventional loan with 5% down payment (If he has good credit history)
My friend get conventional loan from chase with 5% down pyment
Why do you think the buyers need 20% down? I know it's a good idea, but it still doesn't often happen.
Are you wanting to loan the money to the buyers or just give it to them?
Why are you so invested in figuring out the solutions to the buyers financial problems? Is this a house you've had for sale forever? Are these the first buyers that have ever come along? It just seems strange to me that you are so desperate to sell that you are willing to give the buyers the down payment.
I have a situation that brought me to this website...I have a home that needs about $ 20,000 in repairs in which I don't have the money......I need to sell the house desperately due to some huge financial issues.......The VA did an inspection and appraised the house at $ 167,000....I am trying to sell the house for $ 149,000 which is $ 18,000 under market to current value......is there any way to give the buyer money back at closing to help with the repairs.....I guess what I am asking is if I can sell the house for value being $ 167,000.....and give the customer back $ 18,000...can I make a letter for repairs etc....after closing to pay for these repairs????....
Lynn garrison, start a new topic. I had a feeling I shouldn't have responded here...sure enough there's now a response ...but to the original poster from...when 2011 I think thinking it's a current topic. So start a new topic for lots of input.
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