Am I being bad if....

For long term resale value, I thought that if I sell a house for more, but give some cash back to the buyer, it will increase overall values of the area. For example, buyer only wants to only pay $138,000. How about paying $140,000 and then giving them cash back of $2000 afterwards. Is this a stupid idea? (Don’t use the word stupid on me :stuck_out_tongue: ) What are the legalities of something like this?
Another thought, how could I make that $2000 a tax deduction? Like take the buyer - he’s actually an up and coming rehabber - out to lunch (an expensive $2000 lunch :shocked ) so that we can discuss future business opportunities? Then I can deduct that lunch as marketing-to-clientele expenses. I suppose another good idea is, since he is a rehabber, give him a $2000 gift card to Home Depot or something. Did I just plant one foot into jail, er, ummm a nasty audit? :cool


if the buyer is using a lender, then the cash back has to be disclosed. most lenders do not allow for cash back at close unless they are fees that the buyer paid upfront, (appraisal, insurance, credit report). if it’s fha you guys all have to sign something stating that there are no side deals, which in this case there is. Aside from that, $2k is not much to make a significant difference in housing values in a particular neighborhood.

on the other hand, if you are taking back the first mortgage, you can do whatever you want; it’s between you and the buyer.
i’m a mortgage broker, realtor and investor. Not a licensed accountant or attorney. You need to verify this information with the appropriate professionals to find out for sure.