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Location: Official Missourian-Pray for the Natives
382 posts, read 1,065,682 times
Reputation: 380
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What's up with this? Just wanted input on this curious practice I have recently encountered.
Scenario:
"100% help with down payment" Hey, I am a seller why not see what's going on. Could help a potential buyer. Checked out the advertised website. OK, it's a non-profit - set up through a realtor. HUMMMMM! UH, OH!
http://bestsmileys.com/thinking/6.gif (broken link)
Click the links. 100% assistance with down payment. (Oh, goody. Just what I wanted to hear.) Non-profit will pay 100% of down payment BUT (here's the kicker) the owners must sign an agreement to repay the FULL amount issued by the non-profit, on the buyers behalf, back to the non-profit to replenish the "pool" available for other buyers. (Say, what? What about bond money for first time home owners? Who gets the benefit of that?)
http://bestsmileys.com/eek/7.gif (broken link)
You have got to be kidding me! Let me get this right - non-profit will assist buyer, seller will agree to repay non-profit, in addition seller must pay 6% to real estate agent, closing costs, AND any other contingencies, as well. Not to mention that the "donation" does not qualify for a tax deduction nor credit for the seller. What the heck will be left over for a seller to purchase another home? Sounds to me as though someone is on the receiving end and NOT enjoying it.
http://bestsmileys.com/whipping/2.gif (broken link)
Geez, the sellers are taking a beating in this market as it is. This, IMHO, only adds insult to injury.
http://bestsmileys.com/hitting/2.gif (broken link)
Someone, PLEEEZE, enlighten me on this practice......http://bestsmileys.com/clueless/1.gif (broken link)
Last edited by SassyGirl2; 11-12-2007 at 09:48 AM..
Reason: Info added
Location: Mokelumne Hill, CA & El Pescadero, BCS MX.
6,957 posts, read 22,236,066 times
Reputation: 6469
Our local realtors association has a program to assist buyers with closing costs and down payments. It is paid for by our voluntary contributions and is a tax exempt entity. We don't have a repayment option like that though.
What's up with this? Just wanted input on this curious practice I have recently encountered.
Scenario:
"100% help with down payment" Hey, I am a seller why not see what's going on. Could help a potential buyer. Checked out the advertised website. OK, it's a non-profit - set up through a realtor. HUMMMMM! UH, OH!
http://bestsmileys.com/thinking/6.gif (broken link)
Click the links. 100% assistance with down payment. (Oh, goody. Just what I wanted to hear.) Non-profit will pay 100% of down payment BUT (here's the kicker) the owners must sign an agreement to repay the FULL amount issued by the non-profit, on the buyers behalf, back to the non-profit to replenish the "pool" available for other buyers. (Say, what? What about bond money for first time home owners? Who gets the benefit of that?)
http://bestsmileys.com/eek/7.gif (broken link)
You have got to be kidding me! Let me get this right - non-profit will assist buyer, seller will agree to repay non-profit, in addition seller must pay 6% to real estate agent, closing costs, AND any other contingencies, as well. Not to mention that the "donation" does not qualify for a tax deduction nor credit for the seller. What the heck will be left over for a seller to purchase another home? Sounds to me as though someone is on the receiving end and NOT enjoying it.
http://bestsmileys.com/whipping/2.gif (broken link)
Geez, the sellers are taking a beating in this market as it is. This, IMHO, only adds insult to injury.
http://bestsmileys.com/hitting/2.gif (broken link)
Someone, PLEEEZE, enlighten me on this practice......http://bestsmileys.com/clueless/1.gif (broken link)
First, I would think this entire fiasco is nothing more than some sort of "elibility" scenario -- one in probably 1000 people qualify -- and the terms and conditions are so onerous that it would never make sense. Second, if it's on the up and up -- great -- congratulations! Whether it is or isn't, I would think the Attorney General of the respective state would want to look at this.
Third, this has nothing to do with the seller paying the agent. If the seller was working with an agent, they were paying the agent before and they are paying the agent now. Same, same. What the seller may or may not do for the buyer -- and signing off on a potential liability, due to the buyer not paying -- has nothing to do with paying the agent. You might as well say "and the seller has to pay the moving company when they move" or something like that.
Of course, I would pass on this so called great opportunity -- buyer or seller.
What's up with this? Just wanted input on this curious practice I have recently encountered.
Scenario:
"100% help with down payment" Hey, I am a seller why not see what's going on. Could help a potential buyer. Checked out the advertised website. OK, it's a non-profit - set up through a realtor. HUMMMMM! UH, OH!
http://bestsmileys.com/thinking/6.gif (broken link)
Click the links. 100% assistance with down payment. (Oh, goody. Just what I wanted to hear.) Non-profit will pay 100% of down payment BUT (here's the kicker) the owners must sign an agreement to repay the FULL amount issued by the non-profit, on the buyers behalf, back to the non-profit to replenish the "pool" available for other buyers. (Say, what? What about bond money for first time home owners? Who gets the benefit of that?)
http://bestsmileys.com/eek/7.gif (broken link)
You have got to be kidding me! Let me get this right - non-profit will assist buyer, seller will agree to repay non-profit, in addition seller must pay 6% to real estate agent, closing costs, AND any other contingencies, as well. Not to mention that the "donation" does not qualify for a tax deduction nor credit for the seller. What the heck will be left over for a seller to purchase another home? Sounds to me as though someone is on the receiving end and NOT enjoying it.
http://bestsmileys.com/whipping/2.gif (broken link)
Geez, the sellers are taking a beating in this market as it is. This, IMHO, only adds insult to injury.
http://bestsmileys.com/hitting/2.gif (broken link)
Someone, PLEEEZE, enlighten me on this practice......http://bestsmileys.com/clueless/1.gif (broken link)
no..... the reason it says owners is because they are concluding that the buyer will be the new owner
the seller isn't responsible for that
down payment assisstance is thru a non profit org
they submit 3% towards the downpayment or closing costs
it is rolled over into the cost of the loan so their loan is actually bigger that what they originally applied for
the only down side of that for the seller would be if they also agreed to put up 3% towards closing, the potential for the buyer to walk away from the closing with money in his pocket is almost favorable
It isn't really a down side for the seller I guess if they are willing to give assisstance to get the deal done. plus it gives the buyers alittle cash in hand to fix some of the little problems left behind by the previous owner
Sounds like FHA to me. They do it all of the time. Seller agrees to contribute 3% as "gift funds" to buyer for down payment assistance, gift fund organization charges a fee usually $3-400 for this to take place. During negotiations it is common for the buyer/seller to agree to raise the purchase price by that 3%, especially if the seller is paying closing costs in addition.
This happens all of the time. I have had several clients in the past use FHA programs and the seller paid the 3% down and their closing costs. Each time the buyer received back a part or close to all of their earnest money at closing. You cannot receive back more than the earnest money amount.
I have read a few articles in the last few months where they are talking about getting rid of the 3% seller assistance. FHA is a good loan with great interest rates.
Location: Official Missourian-Pray for the Natives
382 posts, read 1,065,682 times
Reputation: 380
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Quote:
Originally Posted by dncngrl1964
no..... the reason it says owners is because they are concluding that the buyer will be the new owner
the seller isn't responsible for that
Well, initially, I was a little apprehensive about referring to the website but, you guys are the professionals so how can you answer my questions without full disclosure. (notice the pun?)
Location: Mokelumne Hill, CA & El Pescadero, BCS MX.
6,957 posts, read 22,236,066 times
Reputation: 6469
I thought it was OK, only I couldn't find out anywhere where the "small fee" was described.
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