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I've engaged a buyer's agent for my upcoming house purchase. She will rebate half of her commission to me at closing.
On a $300,000 house, that amounts to $4,500, depending on the commission percentage. I also plan on asking for a $3,000 seller assist for closing costs, but not sure if that will come to fruition.
In the case that I get both a seller assist AND agent rebate, the total cash back will far exceed my closing costs and pre paids.
I will probably be putting down 20%, which is $60,000. Can this agent rebate go toward this 20%?
I know if, for example, that if this hypothetical $300,000 house appraised for $350,000, I'd still have to put down 20% of contract price (not 20% of appraised price) in order to eliminate PMI.
Question is, will the mortgage lender consider this $4,500 rebate "my" money, or will they reduce net contract amount by the rebate amount ($295,500), and then I have to come up with 20% of the reduced home price?
Interested party contributions can only be paid applied towards your costs, and can't be applied towards your down payment. So the interested party contributions can only be as much as your costs, any excess contribution will go back to the party which it came from. Your loan officer should be able to come up with a fairly accurate estimate of the final costs, and if there will be extra contributions they may be able to use it to buy down/lower the interest rate on your new mortgage.
Interested party contributions can only be paid applied towards your costs, and can't be applied towards your down payment. So the interested party contributions can only be as much as your costs, any excess contribution will go back to the party which it came from. Your loan officer should be able to come up with a fairly accurate estimate of the final costs, and if there will be extra contributions they may be able to use it to buy down/lower the interest rate on your new mortgage.
The agent is claiming otherwise:
"You work with me, xxxxxx, as your Buyer Broker, and when your home purchase closes, you receive 50% of the commission I am being paid to represent you. Yes, it is that simple! (Well, almost. There are a few rules...read on.) At the closing table, you will have a check in hand with your name on it. You can use your rebate for anything you want......perhaps furniture for your new home, or a Flat Panel TV for your new Media Room, or a vacation to Disney for your family. With your Buyer Rebate it is up to you.
YOU CAN EVEN USE THE REBATE AS YOUR DOWN PAYMENT!"
"You work with me, xxxxxx, as your Buyer Broker, and when your home purchase closes, you receive 50% of the commission I am being paid to represent you. Yes, it is that simple! (Well, almost. There are a few rules...read on.) At the closing table, you will have a check in hand with your name on it. You can use your rebate for anything you want......perhaps furniture for your new home, or a Flat Panel TV for your new Media Room, or a vacation to Disney for your family. With your Buyer Rebate it is up to you.
YOU CAN EVEN USE THE REBATE AS YOUR DOWN PAYMENT!"
You can use it for everything listed, except down payment.
"You work with me, xxxxxx, as your Buyer Broker, and when your home purchase closes, you receive 50% of the commission I am being paid to represent you. Yes, it is that simple! (Well, almost. There are a few rules...read on.) At the closing table, you will have a check in hand with your name on it. You can use your rebate for anything you want......perhaps furniture for your new home, or a Flat Panel TV for your new Media Room, or a vacation to Disney for your family. With your Buyer Rebate it is up to you.
YOU CAN EVEN USE THE REBATE AS YOUR DOWN PAYMENT!"
Your agent is probably going to keep it out of the purchase contract that is provided to the lender. Is this RedFin or ZipRealty?
The way it's worded sounds like they'll cut a check directly to you, from ABC Realty to BedfordResident1, not being disbursed through the loan closing, such as from ABC Realty through Accurate Title to BedfordResident1.
All down payment $$ must come from an acceptable source. A check from your agent is not an acceptable source.
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