How to Pay Sellers for a Short Sale

[Jonathan Rexford]

Wanted to get a good thread of ideas on how to pay a seller some moving money that would not violate the lenders rules based on the approval letter. Remember it is the LENDER RULES.....NOT LAW on most cases unless it is some federal loan.

I will start
1. Buy some items at market value from seller
2. Prepay some rent at a house or apartment with check made payable to landlord

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[Scott Hubbard]

I agree with Bill it is best to disclose because it will usually say in the approval letter something like.. seller shall receive no proceeds from the sale..

1. Ask the lender if it is okay for you to give the seller $250.00 to be paid by buyer outside of closing. I have actually received an approval letters with this line item being paid.

Wells Fargo, ASC, and Wachovia on certain loans will actually allow the seller to receive an incentive.

I would certainly try this method first. If this is not an option, then try the following at your own peril:

1. I have been successful in puting a charge on the buyer's side to pay for the moving company on behalf of the seller. Have the moving company send you an invoice to be paid through title. I actually have a terms account with local movers and this works very well. If they bill you, it will be on the buyer's side of the HUD1 and the lender will not think twice.

2. When the seller needs monies to move I will also pay the moving company myself or purchase a gift certificate, NEVER GIVE THEM CASH.

3. Give them something of value that they can use. In dealing with distressed homeowners, I always seem to have extra stuff lying around and I will give them appliances or electronics. A charitible gift is not only nice, it is impossible to trace back to you.

4. Offer to purchase something from them of subjective vaue. Art is always a good choice becuase it is difficult to place an actual market value on. Buy that velvet Elvis painting from the 70's, who knows what it is really worth.

Avoid large dollar amounts and writing checks. First option is to try and get it onto the HUD1 so it is properly expensed.