here's the scoop. first of all, i want to sell my house for no less than $650,000. if i do an FSBO type sale, would I still have to pay a commission to a real estate agent? Also, a realtor told me that he has an investor who is willing to purchase the house at $695k but get back $45k at the close of escrow. What in the world is that?
2007-12-05 12:22:27 · 10 answers · asked by ultimate soccer coach 2 in Business & Finance ➔ Renting & Real Estate
What in the world is that?
That is called loan fraud. Your participation in the scheme can cost you a few thousand in fines and some jail time.
This scheme is one of the factors for the over valued market we now have.
Google "cash back at closing"
2007-12-05 13:09:43 · answer #1 · answered by Anonymous · 1⤊ 0⤋
You never have to pay a realtor unless you want to. If you sell FSBO you can state that you are not willing to coopertae with an agent. This means you're not willing to pay and if an agent brings a buyer the buyer would have to pay the agent out of their own funds.
In order to get cash back at close they would need to mortgage the house for the $695K. Which means that the bank would ave to agree that the value of the property is at least that much. You'll have to review how the offer is written but yes they can get cash back at close. You should be sure to put a condition in that you're only paying commission on the net amount (less and seller concessions).
2007-12-05 12:55:48 · answer #2 · answered by Anonymous · 0⤊ 2⤋
The realtor and investor are playing a game of loan fraud. That's a definite NO-NO unless that cash back appears on the final HUD transaction statement. If the lender approves it, then it's OK. My guess is this is some game they are trying to pay outside of the lender's knowledge.
And I'd venture that the realtor is going to expect a commission for bringing you a buyer. However, you're not required to pay the commission UNLESS you sign a contract with the realtor.
Tell this guy you have no problems doing what he wants as long as the cash back appears on the HUD. Then watch his reaction.
2007-12-05 13:46:31 · answer #3 · answered by acermill 7 · 0⤊ 0⤋
The buyer's agent would get 3% of the sale. You would save the other 3% that the seller's agent would get by selling it yourself.
As for the escrow part, I don't know. That's why it's good to have your own agent, lol.
edit:
Oh, I think I know what that is. He would put $495k into an escrow account and at closing he would get $45k back. Escrow ensures that no property changes hands until all conditions of the sale have been met. I don't have any idea what good that would do, or why one would want to do that.
I wonder if the buyer's agent would get 3% of the 695k (instead of the lower price you're wanting to sell for) and that's why they'd do something like that...
2007-12-05 12:27:07 · answer #4 · answered by Tracker 6 · 0⤊ 2⤋
Why don't you want a divorce, you sure didn't want to work on making the marriage anything worth while. If you had spent all the time you spent on making these other woman feel great just imagine how great your marriage could have been. No you can't use the selling of the house a time to postpone the divorce. I can only imagine how much she hates you about right now. I know the feeling, and soon her hate will turn to disgust, then she will move on and find someone that will realize what a great woman she is and why you didn't treat her with the respect she deserves. Sorry but you are the one that caused all this.
2016-04-07 11:57:13 · answer #5 · answered by ? 4 · 0⤊ 0⤋
If the lender knows about the cash back at closing.. there is no fraud. However, they will not be thrilled about it. Usually, the seller helps with closing costs to a degree. Straight cash back is generally frowned upon by the lenders.
Why would they do that? The investor is trying to buy is with as little out of his pocket as possible. If they purchase the house for $695K, and they put 10% down, they need to put down $69,500. However, with your credit of $45,000, they are only putting in $24,500 to purchase your home. That's why they would want to do it. Just remember.. as far as everyone is concerned, you sold your home for $695K and you will be taxable at that amount. Talk to your accountant first.
As for the agent, if it is FSBO and you did not list it in MLS, you do not have to pay the buyer's agent. The buyer will need to take care of that out of their own pocket.
Good luck.
2007-12-05 20:36:04 · answer #6 · answered by no_mo_names 3 · 0⤊ 1⤋
In most cases the lender will prohibit the buyer from getting cash back.
I recommend that you have an attorney who specializes in real estate law advise you on this.
Also, I recommend that you hire an appraiser who is a Member of The Appraisal Institute to determine the true fair market value of the property.
2007-12-05 12:33:01 · answer #7 · answered by Anonymous · 1⤊ 0⤋
walk away from this deal. Basically the buyer want to do a 100% loan and then have you pay them the 45,000 at settlement. This is mostly illege and the lender WOULD NEVER go for this.
This is part of those scams that you see at midnight on TV.
2007-12-05 13:35:57 · answer #8 · answered by Anonymous · 1⤊ 0⤋
walk away and get a professional Realtor to do this deal also legal counsel on the kickback. illegal in some states.
professional Realtor will keep u out of trouble and get more for less legal hassles.
2007-12-05 12:46:15 · answer #9 · answered by Anonymous · 1⤊ 0⤋
It called mtg fraud and don't do it. They are asking you to kick back 45K at closing.
2007-12-06 10:28:54 · answer #10 · answered by Leo F 4 · 0⤊ 0⤋