seller wants $3000 cash to close .. isnt this illegal?
okay we are now 2 weeks from closing but the problems continue.
Seller is expecting to receive $3000 moving money even though they did not qualify for the HAFA program. They were emailed about this months ago by the negotiator (i was copied on it). They are stating they will not close without it.
isnt it illegal for me (the buyer) or the broker to agree to give them cash to close the deal?
what say you???
Replies to This Discussion
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Permalink Reply by Satar Naghshineh on
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Hi Arod - Stay put for another day. On Wednesday you will tell the sellers of your situation and ask to meet with them to negotiate the appliances.
Eventually the sellers will win with this broker over the 3k. His issue is that he might not have the 3k to give them before he gets paid. Maybe you can give him a loan and he to rebate 3k to you from his commissions.
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Wait, nevermind. He was going to pay them after closing. So forget about the loan idea!
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Permalink Reply by arod on
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ok satar..will do. but you just gave me an idea. can he credit me $3k of his commission on the hud ? would he have to get permission from the bank? do you think they'd allow him to do it? or will it through a wrench in the short sale proceedings?
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satar: one more thing:
" I can tell you that everything you have mentioned so far I have seen. So what you consider difficult, I consider normal." -----> you must have nerves of steel. i'm literally losing sleep over this stuff.
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Yeah, I do. You have to be a calm negotiator in order to conduct a short sale with not just the foreclosing lender, but with the seller and the buyer and the agents involved. However, part of your problem is that you are emotionally involved here. It's for the same reason why I can't negotiate very well with my wife and find myself on the couch more times than I like to admit. ;)
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satar: why does it make me happy to know you are not absolutely perfect? haha! j/k .. i understand perfectly and realize that like you, i am emotionally vested. sigh.
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Permalink Reply by Heather L. Brooks on
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May I ask who the lender is? Generally the lenders don't offer this outside of HAFA and several banks have distinctly in the addendum that the seller cannot receive funds from the sale. Rules regarding lenders are constanly changing, though, and I wouldn't say it's unheard of. It is, however, illegal for you to do any "under the table" money exchange. Anything "given" to the seller has to be on the HUD. Lots of people do it, but it's not above board.
I've done short sales in NC & SC since 2005 and have seen just about every scenario. The seller needs to be reminded that closing the short sale is in his/her benefit. The bank could very easily deny the request, close the file & proceed with foreclosure. Then he/she will get no money AND sink their credit to the bottom.
Good luck to you!
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Permalink Reply by Bryant Tutas on
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"Anything "given" to the seller has to be on the HUD."
Unless of course RESPA doesn't apply. A cash transaction is the most common reason for RESPA to not apply. We aren't bound by rules and regulations that aren't applicable to the transaction. Placing a restriction on a transaction that doesn't need to be there can harm our buyers and sellers. We need to know what we can and can't do. There are times where paying something "under the table" and "off the HUD" is perfectly legal.
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thanks attoney bryant. i kid, i kid.
but yes, that's what i'm trying to maneuver...while making sure all is legal.
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As Bryant points out, there is no specific law against what you are trying to do. RESPA relates to the purchase of a property. However, what two private individuals do on their own and with no assurance of the real estate transaction, should be fine.
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"The seller needs to be reminded that closing the short sale is in his/her benefit. The bank could very easily deny the request, close the file & proceed with foreclosure. Then he/she will get no money AND sink their credit to the bottom." -----> agreed! but you know with emotions running high sometimes it's hard to see clearly. good reminder though.
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Also, when you have nothing to lose, you really don't care for your credit. Some of my clients even file for bankruptcy after the short sale and after getting a lease on a new property. Money at this moment means more than anything else.
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