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Old 07-12-2009, 03:54 PM
 
3 posts, read 11,460 times
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I want to get your opinions on the following strategy for selling a home. The home I want to sell has a minor leak in the roof. As a result, there is minor damage to the ceilings in three rooms. For round numbers, let's say the house will appraise for $130,000 (as is). A new roof will cost $25,000 and the ceiling repairs will be $5,000.

Can I sell the home for $130,000 and have the buyer get a loan for $130,000 and close the loan. Nothing unusual so far.

Can I then have a legal agreement (on the side through an attorney) that states if the buyer purchases the home for $130,000 and gets a loan for that amount and closes on the property, I will then give the buyer a check for $30,000 ($25,000 for the roof and $5,000 for the ceiling repairs). The buyer can do whatever they want with the $30,000.

I just do not know the legal ramifications of this scenario.

Please give me your thoughts!

Last edited by FatherFirst; 07-12-2009 at 04:04 PM..
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Old 07-12-2009, 04:09 PM
 
Location: Raleigh, NC
12,462 posts, read 30,419,355 times
Reputation: 9394
I just put on a new roof on my 2 story home for about $5,000.

Depending on how much the buyer puts down, the lender will determine if they can get money returned to them.

I don't think an attorney would write up this "agreement" as it sounds like loan fraud to me but I am not an attorney.

If you were my seller, I'd advise you to have the repairs done, hire a home inspector to inspect the home, do all necessary repairs, make the paperwork available to potential buyers and sell the home for the true market value.

Vicki
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Old 07-12-2009, 04:25 PM
 
Location: Oxxford Hunt, Cary NC
4,429 posts, read 10,888,219 times
Reputation: 4152
Quote:
Originally Posted by VickiR View Post
I just put on a new roof on my 2 story home for about $5,000.
Mine was about the same.. $25K sounds crazy expensive. I suggest that the OP get some more quotes.
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Old 07-12-2009, 04:48 PM
 
Location: Cary, NC
792 posts, read 4,256,042 times
Reputation: 1343
$25k sounds like a serious problem - way more than just shingles. You're probably looking at rotten plywood roof sheathing and trusses/rafters too, maybe even more. Nobody is going to want to inherit your problems unless they are very well compensated for it. Remember this is a buyers market and there are plenty of neglected foreclosures you are competing with, that are selling for a way less than "appraised" value. Personally I think your on-the-side scheme is crazy, border-line loan fraud! You're better off either fixing the problems yourself or else discounting the price to account for it's as-is condition.
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Old 07-12-2009, 05:33 PM
 
3,155 posts, read 10,256,528 times
Reputation: 2124
Quote:
Originally Posted by adlnc07 View Post
.. $25K sounds crazy expensive.
Cedar shakes? Slate Roof? Cooper? All those would be closer to the 25K mark. But given the house is 130K I doubt this is what he is doing.
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Old 07-12-2009, 05:41 PM
 
Location: Oxxford Hunt, Cary NC
4,429 posts, read 10,888,219 times
Reputation: 4152
The OP says the house has a "minor leak" - which doesn't seem like it would involve the trusses/rafters needing to be replaced. I had at least 5-6 pieces of damaged plywood sheathing and two skylights replaced as part of my roof replacement. I just don't see how a "minor roof" leak can lead to $25K in roof repairs on a $130K house.
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