i'm new to the real estate investment game, and my business partner offered to buy my property by putting on the loan papers he put $XX,000 down as earnest money. when he never has. will i get into any trouble? will he get into trouble? F.Y.I he's a mortgage broker
2007-11-14 09:38:12 · 9 answers · asked by ? 3 in Business & Finance ➔ Renting & Real Estate
the irs can tax you for the full contract price and not what you actually receive. the higher number will show in the official record for the county, and you will be on the hook for a higher property tax assessment as well.
as others have written, your friend is scamming to his benefit and to your detriment.
2007-11-14 17:07:57 · answer #1 · answered by Shell Answer Man 5 · 0⤊ 0⤋
Earnest money is used as a "good faith" deposit so that the buyer will perform on the contract. In the event he does not you are able to keep the earnest money. Earnest money deposits can be either kept by the seller or in escrow at the title company.
As the seller it is up to you how much (if any) earnest money will be required for the sale. I would be suspect of anyone that wants to falsify a contract. Your trouble will come from getting the buyer to follow through with the agreed upon contract if you allow them to begin dishonestly.
Just because he's a mortgage broker doesn't mean he can't rip you off. Beware.
Good luck.
2007-11-14 10:08:11 · answer #2 · answered by Anonymous · 0⤊ 0⤋
If you have a contract in writing saying that he has put the money down - how will you prove that he hasn't? Mortgage fraud is rampant and if you are partners - your agreement should outline the facts, not fiction. Basically he is trying to get a 100% loan by inflating the price and saying that the value is higher than the moneys being loaned - this is mortgage fraud and your "mortgage broker" friend knows this. Either he qualifies for the loan on its merits or he doesn't.
Protect yourself - do not sign anything that says he has given you funds that he hasn't. Call a lawyer or local realtor and get a proper contract written. If he is doing the loan through his own company he could get in trouble if audited - and so could you if it was proven that you knew the documents were fraudulent.
2007-11-14 09:52:18 · answer #3 · answered by Anonymous · 0⤊ 0⤋
There was alot of this in the past. In these day and times I would watch anything that is not straight and legit. the only time there would be an issue is if the lender asked Him to verify the earnest money.
The reason for this is... If he could only get a loan for 90% he would need to show he put the 10% down. In reality he did not and got into the property at no cost.
The decision is up to you. If you are getting the money you require then this should not be an issue.
2007-11-14 09:47:53 · answer #4 · answered by Doug M 1 · 0⤊ 1⤋
Whoever is doing this transaction (in some areas it's an escrow company, in some areas it's a title company, in some other areas it's a real estate attorney) needs to have the earnest deposit in their hands. They'll see the amount and not the money and it will not work.
If you are doing the transaction yourselves, without the above mentioned, you are asking for trouble.
It makes sense for you to spend several hundred dollars and consult a real estate attorney.
2007-11-14 09:49:32 · answer #5 · answered by REALTOR 3 · 1⤊ 0⤋
State regulations concerning a home purchase is very rigid in most states. Plus no matter what he writes down, he will have to produce check stubs or proof of payment the closing attorneys. I would ask more questions of him and see when/how he is going to deposit the earnest money.
2007-11-14 10:34:19 · answer #6 · answered by Lear R 2 · 0⤊ 0⤋
you do no longer want a larger half to instruct residences, extraordinarily one without fairness interior the dating. hit upon a stable lawyer, and a powerful contractor, and pay as you bypass. Realtors are a dime a dozen, and on your question, the realtor brings little to the table different than yet another drain on earnings. once you're severe, a stable realtor turns into in contact for the commissions on my own he can earn off you, after all, that's what they do.
2016-10-16 13:09:35 · answer #7 · answered by gilboy 4 · 0⤊ 0⤋
It's a basket of snakes.
Poisonous snakes and you're about to be bitten.
Run as fast as you can.
The FIRST principal of success is integrity, or as some people would say honesty.
This is dishonest to the lender, and could snare you in the web of lies.
2007-11-14 13:19:54 · answer #8 · answered by Terry S 5 · 0⤊ 0⤋
Don't do it. It's fraud.
2007-11-14 09:48:48 · answer #9 · answered by Debdeb 7 · 0⤊ 0⤋