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Creative Real Estate Financing

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Matt Cottrill
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Appraisal higher than purchase price - seller credit limits

Matt Cottrill
Posted Nov 14 2022, 12:17

I have an investment property under contract at 130k with a 4k seller credit to property manager at close. Appraisal landed at 145k. I would love to up my borrowed amount and get a credit for it somehow. My proposal to lender was to credit 10k in closing costs / ppd insurance/taxes and credit an additional 5k to pm, but lender is pushing back indicating there are limits to seller credits - reading online it looks like the 4k credit might already be over the limit, so maybe that would've gotten twisted up before close as well.

Anyone knowledgeable on this have any ideas how I can extract this value? Currently looking at a conventional loan with 20% down, state is SC.

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Matt Cottrill
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Matt Cottrill
Replied Nov 14 2022, 13:15

Can I insert an entity I owe an assign the contract for a wholesale fee maybe?

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Caleb Brown
  • Real Estate Agent
  • Blue Springs
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Caleb Brown
  • Real Estate Agent
  • Blue Springs
Replied Nov 14 2022, 13:25

I believe the max is 2% allowed for closing costs. At 130K the max seller can pay is 2.6K. No way around that. 

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Matt Cottrill
Replied Nov 14 2022, 13:50

@Caleb Brown That seems to be what I'm coming up with as well - thanks for the alignment

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Ian Cruz
  • Investor
  • Bay Area, CA
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Ian Cruz
  • Investor
  • Bay Area, CA
Replied May 17 2023, 23:22

@Matt Cottrill What if you applied to seller credits and then the rest towards an escrow account for repairs?