I am selling a home? How much cash back can I give my buyer? I have heard none, 6% and as much as you want..?

Question

How do I write a contract up to give cash back legally?

Answer 1

SHACKLESO YOU DOPE !!!!! GIVING A REBATE OR CASH BACK TO THE BUYER IS AGAINST THE LAW!!!!(READ ABOUT RESPA LAW ) GOOD ADVICE GET THEM ALL LOCK UP.YOU ARE IN THE MORTGAGE BUSINESS!!!! NOT FOR LONG!!! THE BUYER MAY NOT GET ANY THING BACK . THE SELLER MAY PAY TOWARD THE CLOSING IT IS CALLED A SELLER CONCESSION . THE MAX ALLOW IS 6%(NOT 9%) IF CLOSING IS ONLY 5 % THAT IS ALL THAT THE SELLER MAY PAY(5% ONLY ) TOWARDS THE CLOSING.
TO WRITE THE CONTRACT UP LEGALLY EITHER THE REAL ESTATE AGENCY OR A LAWYER CAN DO IT. BUT CHECK TO SEE IF THE BUYERS MORTGAGE COMPANY ALLOWS IT ( MOST DO)
IF you have any questions please email me at [e-mail]

Answer 2

I am a Mortgage Consultant and you can legally give a anywhere from a 6-9% seller concession if the lender allows. Most sub-prime programs allow 6%-9% seller concessions. What that means is that you will have enough to cover closing costs which are usually 3%-5%, plus 1%-4% to play with which can result in cash back at closing.

Example 200,000 home with a 6% seller concession and 4% closing costs would look like this:

Purchase with a 6% seller concession.
$200,000 purchase price
$8,000 (origination fee, attorneys fees, etc.)
$4,000 rebated back to the buyer


I only know if one lender that does a 9% seller concession, but if you can use them the scenario would look much more favorable:

$200,000 purchase price
$8,000 (origination fee, attorneys fees, etc.)
10,000 rebated back to the buyer

Just remember the lender must allow the seller concession and it must show up on the HUD settlement statement. I hope this helps.

Answer 3

I WOULDN'T DO IT!!!

My family has been burned to the tune of over $10000 with this cash back nonsense. If it is presented to you as a secondary loan to help the buyer, fire the realtor and get another!!!

After a short time, the "buyer" will default on the first - primary mortgage and you will be left holding worthless paper - PERIOD. By this time, the property will have been run down and abused and even if you decide to get it back from the primary lender you will loose even more $$$.

Answer 4

The easiest way to do so legally is to draw up a contract for sale on a persoanl item belonging to the buyer and make this contract contingent on your ability to sell your house. Maybe the buyer has a grilled cheese sandwich with the image of the Virgin Mary on it that you can buy?

Disclaimer: I am not a lawyer, nor do I play one on TV.

Regards

Answer 5

It depends upon the buyer's lender. Most allow a seller to pay for "non-recurring closing costs", which add up to about 1.5% or more, depending upon impounds and whether or not they want to "buy down" the interest rate with points. You can also provide downpayment assistance in the form of a credit, also needing approval of the lender If you give credits for repairs, be careful how it is worded. Lenders don't like to see large credits for this; it looks like they are lending on a house that is in a state of disrepair. As long as the lender doesn't care about down payment assistance, then you can give as much as you want.