I want to sell a house for 130,000. The buyer has been approved for 150,000 and wants us to sell them the house for 150,000 and give them back 20,000 at closing so they can make circular driveway. Is this legal and where would I out 20,000 on hud? I aam selling this through my ira so not supposed to pay any tax on the sale. Can u experts help me? Thanks!!!
Any realtor, attorney, broker, will have purchase agreements on file. Or you can download one and add in your info. But I would suggest you use an attorney or 3rd party company that would be legal to transfer the money since it is your ira.
Generally, this can’t be done without the buyers lender being notified of it
and having them approve it… You might want to place a call to your title
company/attorney to see what they say…
I have p/a but didnt know of ots legal to do or not without telling mortgage company??
Sorry to pea on your party but that would be mortgage fraud in a serious fashion…Yes deals are done like that all the time but it’s mortgage fraud and they have been cracking down on that now more than ever.
You could put in escrow to pay a concrete contractor if the bank would let that fly but I doubt it.
Write up the sale and purchase agreement for $150K and in the special provisions section write in “Seller agrees to give buyer $20K for driveway replacement.” The lender will get a copy of the contract, so everything will be fully disclosed to the lender.
Provided the lender has no issue with your large repair concession, it is up to the lender to ask the settlement agent to escrow the $20K to pay for the driveway. Hopefully, your property will appraise for more than $150K so the lender can base your buyer’s loan on the contract purchase price. If the property will not appraise that high, then you will have to renegotiate the contract price and the amount of the seller concession.
To get the house to appraise for 150 or more just payoff the appraiser with some of the 20k you were going to pay the buyer.
Michael, surely you jest with this advice, I would recommend you consider letting the posters here know that you would never advise anyone to commit loan fraud.
John $Cash$ Locke
REIClub Moderator
Yes, that would be the unethical way to do it. That’s why people are trying to change things so appraisers are more independent and unbiased.
Justin,
Not just unethical, but illegal – this is collusion to commit mortgage fraud. If the loan is federally insured, a conviction will be a felony conviction with a fine up to $250K and/or up to two years confinement in a federal prison.
For Michael to endorse mortgage fraud is just irresponsible. Don’t do it.
It’s this kind of crap the reason why lenders and others frown upon flippers and other real estate investors.
This is mortgage fraud at its finest unless you want the SEC and the FBI knocking on your door I suggest you avoid doing this.
What if I sold house for 130 and had 20,000 put in escrow. Does thast sound legal?
Hell John…
I forgot people don’t have a sense of humor 'round here…
So just in case some of you ran out to pay off an appraiser to inflate an appraisal so you could give back the buyer 20k stop its illegal…
BTW there is nothing illegal about the 20k seller concession as long as it is disclosed to the lender on the HUD1.
It does appraise for 150, so they are getting a deal but we were trying to seal deal by putting the 20,000 in for them on their loan for a new driveway but cant figure out how with va loan. Thanks for any suggestions