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I would make darn sure that all this is properly documented and signed off by the seller. Most contracts concerning closing cost specifically used the wording 'closing cost', so the seller may show up at closing and refuse to go along with your lenders ideas as appliances are not closing cost.
Of course the seller must agree to this........the OP does not buy the appliances. nor add it to his credit cards. They arrange for a local appliance store to have invoices present at the closing table to be paid from the seller's proceeds. This is treated no different than the seller paying $1000 for termite treatment from his proceeds. It's a win-win for everyone. Most sellers really only care about the bottom line.
Thanks for your answer Rick. I contacted my lender and he said that as long as the appliance company brings an invoice to the closing table for the 5k in appliances, they have no problem having the title company issue a check at the closing, payable to the appliance company which will be either mailed to them or given to me the day we close so I can take the check to the appliance company and have them proceed with delivery of my applainces.
From the seller's perspective whether the money is used towards closing costs or pink unicorns it doesn't affect them. (My lender's words, not mine).
As for my employer's side of things, they told me the wire the closing cost money directly to the title company a few days before closing so we're in good shape. I just came back from the appliance store, and picked up top of the line items on the seller's dime, and walked out with a commercial invoice for the whole thing. (My wife was trilled)
I was somehow dissapointed in my realtor's lack of knowledge in this regard, since I originally asked him and he categorically said this couldn't be done, and told me to just suck it up and pay for the appliances. I have the feeling he just didn't want to go out of his comfort zone since he wasn't familiar with this and just by the look on his face you could tell he was only thinking about not jeopardizing his commission. Well, It turns out it CAN be done so if anyone is in the same position as me, now you know.
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Last edited by TimtheGuy; 06-13-2013 at 08:30 AM..
Thanks for your answer Rick. I contacted my lender and he said that as long as the appliance company brings an invoice to the closing table for the 5k in appliances, they have no problem having the title company issue a check at the closing, payable to the appliance company which will be either mailed to them or given to me the day we close so I can take the check to the appliance company and have them proceed with delivery of my applainces.
From the seller's perspective whether the money is used towards closing costs or pink unicorns it doesn't affect them. (My lender's words, not mine).
As for my employer's side of things, they told me the wire the closing cost money directly to the title company a few days before closing so we're in good shape. I just came back from the appliance store, and picked up top of the line items on the seller's dime, and walked out with a commercial invoice for the whole thing. (My wife was trilled)
I was somehow dissapointed in my realtor's lack of knowledge in this regard, since I originally asked him and he categorically said this couldn't be done, and told me to just suck it up and pay for the appliances. I have the feeling he just didn't want to go out of his comfort zone since he wasn't familiar with this and just by the look on his face you could tell he was only thinking about not jeopardizing his commission. Well, It turns out it CAN be done so if anyone is in the same position as me, now you know.
Here's what I would have done. Obviously if you don't need the seller's permission to use the 5k for appliances what you proposed is the best bet. However if you do, I doubt they will give it. Because if they don't they've saved 5k. And there is really nothing you could do besides back and lose your earnest money.
But I would have talked to the sellers and told them your employer was offering to pay for the closing costs and if the costs were 4k, asked for 3k worth of furniture. If they declined you could tell them that you would decline your employers offer and they could pay for the closing costs as agreed(of 4k, and I would follow through on that).
However as I said in the begining, if you don't need their go ahead what are suggesting is best. And I'm not lawyer so i can't give legal advice so you should run whatever you decide to do by your lawyer.
But I would have talked to the sellers and told them your employer was offering to pay for the closing costs
I agree. If I showed up at closing and found out about this when an invoice was shoved across the table at me, I'd be pissed and confused and not likely to hand you $5K.
And, the OP is getting all the info and O.K. from the LENDER, not the seller, the seller's agent or their own agent, it's the lender telling the OP all is good and it really doesn't matter to the seller what the 5k is used for.
I agree. If I showed up at closing and found out about this when an invoice was shoved across the table at me, I'd be pissed and confused and not likely to hand you $5K.
I see what you mean. That's probably why my lender told me today he's having the seller sign an addendum about this weeks ahead of closing, so there are not any last minute surprises.
Yes, get seller to sign addendum. Up to 5K closing costs - if you have no closing costs, seller keeps their 5K. I know this is a bit different but it really needs to be negotiated. I hope your agent is helping you.
Yes, get seller to sign addendum. Up to 5K closing costs - if you have no closing costs, seller keeps their 5K. I know this is a bit different but it really needs to be negotiated. I hope your agent is helping you.
Thanks Nina, that's what we're doing right now. My realtor is "reluctantly" helping. He feels that this is somehow going to jeopardize his commission and he's made pretty evident that's the only thing he cares about. (on the other hand He has no problem whatsoever making me spend 5 grand out of my own money even if I don't have to). I will not hire him again nor recommend him to anyone else after we're done with this sell, that's for sure.
Thanks Nina, that's what we're doing right now. My realtor is "reluctantly" helping. He feels that this is somehow going to jeopardize his commission and he's made pretty evident that's the only thing he cares about. (on the other hand He has no problem whatsoever making me spend 5 grand out of my own money even if I don't have to). I will not hire him again nor recommend him to anyone else after we're done with this sell, that's for sure.
If the sellers give you a hard time I would make it clear that they are going to pay your closing costs not your employer(you can tell the you won't submit the costs to your employer), that's really the only leverage you have. But wait and see if they they'll sign the addendum, make sure you have enough time to negotiate. I would probably avoid telling them that your employer will pay and ask to use the money for furniture instead(but I'm sure they'll figure it out).
If the sellers give you a hard time I would make it clear that they are going to pay your closing costs not your employer(you can tell the you won't submit the costs to your employer), that's really the only leverage you have. But wait and see if they they'll sign the addendum, make sure you have enough time to negotiate. I would probably avoid telling them that your employer will pay and ask to use the money for furniture instead(but I'm sure they'll figure it out).
That won't get the OP anywhere and should only be used as an absolute last resort.
If the seller is reluctant, ask for $4,500, or even $4000 in appliances. You'll still come out ahead of using the seller's funds for closing costs.
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