If a buyer is having a hard time getting a loan for a townhouse that a friend wants to sell for $51k, because the bank requires the loan to be at least $50k after 15-20% down, would it be okay for his friend (the seller) to say he is selling the house for $65k, so the buyer can qualify for the loan? So, $65k loan with 20% down ($13k) leaves a loan of $52k. The $14k ($65k-$51k) that was payed over what the seller wants, is given back to the buyer to fix the foundation and any other repairs. Is this legal? If not, can the contract say the seller will put $14k towards fixing the foundation after closing, since he has the $14k extra in his account?
I think it's unethical if you don't disclose, not sure about illegal...
Try adding a line along the lines of 'seller to contribute $14k to buyers repairs, reoccurring and non reoccurring closing ccosts' to the contract. You should talk to a local title company to be sure it ok to do that in your area.
primary home or investment?
just need to disclose it to all parties its up to the lender in this instance.. title company and escrow company just follow escrow instructions they don't make the rules of the transaction..
I spoke with the mortgage company, and they said as long as the house appraised for $65k, they don’t care what money is exchanged between the seller and buyer after closing. If he wants to write me a $14k check to repair the foundation, that’s not a problem.
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