For example, if I sell the home for $500,000 would I then give a specified amount of money back to the buyer after I receive profits from escrow?
2007-11-27 12:45:10 · 7 answers · asked by Kyle E 1 in Business & Finance ➔ Renting & Real Estate
Giving cash back to the buyer in a transaction with a loan that is insured by the Government is prohibited by governmental regulations.
What is not prohibited is to pay the closing costs of the buyer, provided that this is disclosed to the lender and does not exceed the amount permitted by the lender and is for payment of closing costs approved by the lender.
2007-11-27 13:06:05 · answer #1 · answered by Anonymous · 0⤊ 1⤋
No, it is not illegal.
Usually the seller and the buyer agree beforehand on a price. They haggle some more and they come to an agreement on what is a reasonable amount for the property and cash back to the buyer.
So a 100K home. I offer 90K, seller offers 95K, I say well, how about 93K and 1K back at singning, they accept. I am actually buying the house for 94K and receiving back 1K at the closing. Usually disclosure to the lending company is required. However, many times the source of finance is not related to the home (ie. no mortgage on the proprety in questoin) and then you don't have to disclose.
2007-11-27 13:01:52 · answer #2 · answered by Anonymous · 0⤊ 1⤋
It's not legal. The bank will consider it faurd. What can be done, though, is that the seller can offer to pay the buyer's closing costs.........or, state that they will give a certain dollar amount towards closing costs, but, this also has to be disclosed, but, most lenders don't have an issue with it.
2007-11-28 02:03:05 · answer #3 · answered by Maria Rose 5 · 0⤊ 0⤋
cash home sale work buyer cash purchase
2016-02-03 03:04:00 · answer #4 · answered by Stacee 4 · 0⤊ 0⤋
The settlement sheet that is prepared at time of closing by the settlement clerk or attorney will reflect how much money the buyer is legally owed from the settlement funds. No more, no less.
2007-11-27 14:58:10 · answer #5 · answered by !!! 7 · 0⤊ 0⤋
Don't even consider doing that, unless this transaction is on the HUD settlement statement and the lender is fully aware of what is occurring. Doing otherwise is loan fraud. I don't think you want to be a party to THAT.
2007-11-27 12:49:10 · answer #6 · answered by acermill 7 · 1⤊ 1⤋
Except under very few circumstances, it's called fraud and it is a crime. There are legitimate ways to do this, but those ways are very few and far between.
2007-11-27 13:07:09 · answer #7 · answered by mcmufin 6 · 0⤊ 0⤋
It's illegal, think again.
2007-11-27 12:53:02 · answer #8 · answered by Anonymous · 1⤊ 1⤋