Any circumstances when a home seller gives a buyer a check
Any circumstances when a home seller gives a buyer a check
I'd love your insights.
After an inspection, our home buyer asked for repairs of three issues. We obtained an estimate for the work, then offered to give a credit for half of this amount. The agent (who represents us both) told us that the buyer wants more than half, more than 2/3. To help move the sale along, she offered to give up a tiny bit of her commission if we would write a check to the buyer for their requested repair amount.
None of these are big amounts of money, just a little more than $1K. We would like to sell our home, but we are very uncomfortable writing a check to a buyer. In no case would we give a check to a buyer unless it's in the contract. Then, the only outstanding issue is how much we are willing to concede.
Have you ever experienced anything like this? What are the pitfalls?
After an inspection, our home buyer asked for repairs of three issues. We obtained an estimate for the work, then offered to give a credit for half of this amount. The agent (who represents us both) told us that the buyer wants more than half, more than 2/3. To help move the sale along, she offered to give up a tiny bit of her commission if we would write a check to the buyer for their requested repair amount.
None of these are big amounts of money, just a little more than $1K. We would like to sell our home, but we are very uncomfortable writing a check to a buyer. In no case would we give a check to a buyer unless it's in the contract. Then, the only outstanding issue is how much we are willing to concede.
Have you ever experienced anything like this? What are the pitfalls?
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Re: Any circumstances when a home seller gives a buyer a check
The most I would do is lower the price by an agreed upon amount. In a recent sale I did agree to do some work that an inspection found was unsafe and violated code, since that would have to be done regardless of who bought. But I would not give a check to the buyer, who could, after all, just walk away with your money.
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Re: Any circumstances when a home seller gives a buyer a check
I heard about a guy who did some remodeling to my house before selling it, including putting in an entire new and different staircase. The house sold a little quicker than they anticipated it would, and they didn't recarpet.
Obviously the buyers brought up the fact that the stairs didn't have carpet. It was a young couple who were going to be cash strapped, so instead of lowering the purchase price (which doesn't help them free up any capital for actually making the changes), they just wrote them a check.
Obviously the buyers brought up the fact that the stairs didn't have carpet. It was a young couple who were going to be cash strapped, so instead of lowering the purchase price (which doesn't help them free up any capital for actually making the changes), they just wrote them a check.
Last edited by Purelife304 on Wed May 06, 2015 6:07 pm, edited 1 time in total.
Re: Any circumstances when a home seller gives a buyer a check
This article claims it's a means for a buyer to commit mortgage fraud, by having an undisclosed side deal.
http://realtyassociation.com/files/mortgage_fraud.pdf
http://realtyassociation.com/files/mortgage_fraud.pdf
Last edited by nordsteve on Wed May 06, 2015 6:43 pm, edited 1 time in total.
Re: Any circumstances when a home seller gives a buyer a check
When we sold in CA, we had to pay to have the toilets replaced with low-flow ones. We shopped at Home Depot and came up with a price for a standard toilet, then let the buyer decide if they wanted a nicer one (they paid the difference). I believe we had to have the work done before the close, and I believe it was all on paper in the contract - we didn't write a check.
Re: Any circumstances when a home seller gives a buyer a check
If a seller wants to remain in a house after closing, they usually have to pay "rent", which is itemized in the contract. If their stay ends up being longer than was anticipated, they would have to write a check to the buyer. Not the same as the OP example, but it is a possible circumstance.
Re: Any circumstances when a home seller gives a buyer a check
When we sold my mother's house after she passed away, we got an offer on her house for more than the asking price, but they wanted us to pay portions of the closing costs that would normally be the responsibility of the buyer. The offer net us the asking price less about $1K. Since we had priced the house to sell in a reasonable period (and it was before the housing crash) they had no problem getting a bank loan for 80% of the now higher purchase price, but they only had to come up with minimal closing costs.Mintee wrote:I'd love your insights.
After an inspection, our home buyer asked for repairs of three issues. We obtained an estimate for the work, then offered to give a credit for half of this amount. The agent (who represents us both) told us that the buyer wants more than half, more than 2/3. To help move the sale along, she offered to give up a tiny bit of her commission if we would write a check to the buyer for their requested repair amount.
None of these are big amounts of money, just a little more than $1K. We would like to sell our home, but we are very uncomfortable writing a check to a buyer. In no case would we give a check to a buyer unless it's in the contract. Then, the only outstanding issue is how much we are willing to concede.
Have you ever experienced anything like this? What are the pitfalls?
Perhaps you could work your concession the same way and offer to cover $x of their closing costs? They would then only get the benefit if they actually purchased the house.
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Re: Any circumstances when a home seller gives a buyer a check
We sold our house. The day before closing the washing machine died a tragic and violent death. It was supposed to convey with the house. Told the buyer, and we paid half the cost of a new washer at closing. Struck the washer from the contract.
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Re: Any circumstances when a home seller gives a buyer a check
We sold our house. The day before closing the washing machine died a tragic and violent death. It was supposed to convey with the house. Told the buyer, and we paid half the cost of a new washer at closing. Struck the washer from the contract.
Re: Any circumstances when a home seller gives a buyer a check
I sold a house last month. The inspection found more problems than we expected, so I agreed to give the buyer $1000 to help pay the difference. That was somehow left out of the escrow instructions and it was discovered at the last minute. My agent told me it would be acceptable to give them a check after the deal was done, rather than rewrite everything and delay the closing. So I gave them a check.
High risk does not equal high reward. It equals high risk of no reward.
Re: Any circumstances when a home seller gives a buyer a check
Something similar happened when I bought this house. A check for the credit for damaged flooring came to me after closing because it got overlooked during closing. I can't recall if it was made out to me or made out to the flooring company that I hired. The closing had already been delayed for nearly two weeks while waiting for the roofers to finish their work, so this prevented further delay.auntie wrote:I sold a house last month. The inspection found more problems than we expected, so I agreed to give the buyer $1000 to help pay the difference. That was somehow left out of the escrow instructions and it was discovered at the last minute. My agent told me it would be acceptable to give them a check after the deal was done, rather than rewrite everything and delay the closing. So I gave them a check.
Re: Any circumstances when a home seller gives a buyer a check
We are currently on the other side of the transaction. After the inspection turned up some issues to be addressed, we asked the seller to contribute toward the closing costs, and he agreed. I preferred that to a reduction in the asking price because the latter wouldn't have much of an impact on the immediate cash available to fix the problems...and I preferred to fix them myself rather than have the seller choose the cheapest fix. A credit toward closing costs is as good as a check to the buyer but without the risk to the seller.
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Re: Any circumstances when a home seller gives a buyer a check
Who's interest does this agent look out for - the buyer, the seller, or hers?The agent (who represents us both)
Re: Any circumstances when a home seller gives a buyer a check
+1stevep001 wrote:This article claims it's a means for a buyer to commit mortgage fraud, by having an undisclosed side deal.
http://realtyassociation.com/files/mortgage_fraud.pdf
In addition to the legality, there can be all sorts of problems if the sale does not close for any reason which is more common than you might think.
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Re: Any circumstances when a home seller gives a buyer a check
Haven't experienced this but perhaps the agent doesn't want a lower sale price because it will affect her two commissions?Mintee wrote:I'd love your insights.
To help move the sale along, she offered to give up a tiny bit of her commission if we would write a check to the buyer for their requested repair amount.
None of these are big amounts of money, just a little more than $1K. We would like to sell our home, but we are very uncomfortable writing a check to a buyer. In no case would we give a check to a buyer unless it's in the contract. Then, the only outstanding issue is how much we are willing to concede.
Have you ever experienced anything like this? What are the pitfalls?
Re: Any circumstances when a home seller gives a buyer a check
When you have the same person representing both sides of the transaction you can only get 50% of their effort. Or worse???
Wouldn't you rather have someone who is 100% on your side? And then their is no question who they are looking out for.
Its questionable enough when the two agents work for the same firm.
Wouldn't you rather have someone who is 100% on your side? And then their is no question who they are looking out for.
Its questionable enough when the two agents work for the same firm.
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Re: Any circumstances when a home seller gives a buyer a check
My understanding is that this language would all need to be in the inspection contingency paperwork and fully signed off on by both parties plus the realtor taking a lower commission. After that, all money exchanging hands (including the realtors) is to be handled by the title company. I'd expect the title company to get really feisty (spelling?) if any money went around them.
In short, I'd agree that no check should be written to a private party on either side of the transaction. The title company should be managing all of this.
stout
In short, I'd agree that no check should be written to a private party on either side of the transaction. The title company should be managing all of this.
stout