Would This New 0 Money Down Strategy Work?

[Hart Pearson]

Here's the hypothetical... Could an investor whose licensed as an agent use increased commission to offset their downpayment?? Say for example...

Purchase of $100k using conventional mortgage, Seller pays closing costs, seller pays 6% commission plus $15k selling agent bonus. 

Would this work? If not where would it get derailed?

[Greg Dickerson]

Originally posted by @Hart Pearson:

Here's the hypothetical... Could an investor whose licensed as an agent use increased commission to offset their downpayment?? Say for example...

Purchase of $100k using conventional mortgage, Seller pays closing costs, seller pays 6% commission plus $15k selling agent bonus. 

Would this work? If not where would it get derailed?

This is a good strategy that’s been used as long as I’ve been around and well before that I’m sure. Some sellers and agents get it some do not. I actually had a sellers agent advise their client not to do this one time. They just couldn’t wrap their mind around it.

The thing to keep in mind is the commission will be taxed as income so sometimes it’s best to take it as a discount or use it as a credit closing costs etc.