Posted by Brent-AR on May 14, 2003 at 21:30:59:
or at least in a grey area.
Check the HUD website about RESPA.
It has probably been brought up a number of times.
Raising the purchase price- cash back - Posted by isham
Posted by isham on May 14, 2003 at 20:13:28:
Have any of you guys raised the purchase price with a seller above their asking price to get cash at closing.
For example the seller is asking 80k, you offer him 70k with him paying all closing costs. He agrees, then you explain you’d like to do some remodeling and would like him to sign a purchase and sales agreement for 80k, which would give you 10k at closing and he would still get a check for his equity.
My clossing attorony says he can give the seller two checks at closing, which would one would be endorsed by the seller and given to me.
Has anyone cosistenty purchased houses like this?
Has anyone gotten stiffed by a seller doing this?
Thanks for your help, I appreciate your time!
Re: Raising the purchase price- cash back - Posted by Carol
Posted by Carol on May 16, 2003 at 06:46:08:
We have used a variation on this theme, but everything was out in the open, in the contract, and approved by the lender.
A portfolio lender used to be willing to finance up to 95% of taxed assessed value, and didn’t care what else happened… seller seconds, cash back, etc.
We wrote contracts where the purchase contract reflected seller credits at closing to the buyer for specific repairs (carpet, replace two windows, paint exterior, whatever), and walked away from those closings with repair money.
Needless to say, the purchase contract was either less than the 95% value OR included a seller held 2nd. In any case, we had cash in hand at the closing, and it was all “legit” and OK with the lender.
That’s where the difference comes in between fraud and creativity, IMHO.
Regards,
Carol