Posted by Brent_IL on November 01, 2001 at 19:38:11:
Try several smaller agreements which can be disclosed to the bank. Nothing major. You don’t want the bank to think it would be in their best interests to open a repair escrow. Ten percent is a lot of unspecified repairs.
Arranging contract for cash-out purchase - Posted by Ben (FL)
Posted by Ben (FL) on November 01, 2001 at 16:29:12:
I’ve spent the last few months arranging subject-to and sandwich lease deals, and now, I’m having brain-lock filling out a traditional purchase and sale agreement.
Here’s what I want to do. Property should appraise for $55,000 and is in excellent condition. Seller only wants $41,000. I need to take cash out when I buy. My bank will lend up to 90% of the lesser of purchase price or appraised amount. So, the contract price and appraised amount need to tbe the same - $55,000.
The bank will let the seller give a 10% “repair credit” for my use as down payment. So, I need to write the contract such that the sale price is $55,000. I get financng for $49,500 (90%) and the seller gives me a repair credit of $5,500. The seller’s $39,000 loan gets paid off, and they get $2,000.
I would rather avoid setting up some separate agreement whereby the seller gets $49,500 at closing then gives me $8,500 after we leave the closing table.
Any thoughts are welcome - the simpler the better of course.