How To Reduce Closing Cost
I am in the process of buying a foreclosure property. I have gotten the price I wanted to on the property. But the closing cost is extremely high at around 6,000. Is there a way in the future I can negotiate prices and reduce my closing cost so that I will not have to pay a high amount in the future.
Depending on your financing, you could have the seller contribute between 2-6%.
Good luck
Everything in life is negotiable. Learn why you are being charged that specific fee and have it reduced.
no venture no gain or no ask no get
John
why dont you put a lien on the property for like 10k before you buy it and then use that money you get at closing and actually walk out of closing with all your closing cost paid and a little more cash for yourself?
How exactly does that work???
Yeah Ryand, Please school us on how he would put a lein on a foreclosed property? How would you put a lein on a property that you have no legal right to?
If anybody could do that to any property I could do it to your property without ever knowing you seeing you, I could randomly just pick an address and throw a lein on.
Please enlighten us.
Thank You
Quote:
On 2005-02-28 09:35, ryand wrote:
why dont you put a lien on the property for like 10k before you buy it and then use that money you get at closing and actually walk out of closing with all your closing cost paid and a little more cash for yourself?
Anyone can put a lein on any property at any time they want. All you have to do is go to a office supply store, buy the form, fil it out and take it to the recorders office.
The enforcement of the lein is a different matter. My guess is that since you are buying the property, you would be the only person who could challange the lein. I have had leins that were improperly filed removed several times prior to a closing. Now intent to defraud is a whole different subject!
Creative investing is great; a lot of fun and you get to help a lot more people.
However, placing a lien on a subject property, you plan to purchase just to defraud the lender and the system is illegal.
Folks do the deal honest and fair. If you have to do deals this way you do not belong in the business!
Follow this type of advice and free room and board will soon follow.
A great article on this is at: http://doityourself.com/houseclosing/reduceclosingcosts.htm
[addsig]
That was the point I was trying to make. Anyone can file false documents, file bogus lawsuits. file just about anything. My question is when do we stop "doing" what it takes and start doing what is "right".
Hlevin & NancyChadwick
Are saying the same things.
The post was in reference to:
Quote:
On 2005-02-28 09:35, ryand wrote:
why dont you put a lien on the property for like 10k before you buy it and then use that money you get at closing and actually walk out of closing with all your closing cost paid and a little more cash for yourself?
Just want to make sure we are all on the same page!
[addsig]
if you do any sort of work to the prop before you buy it and they "dont pay you for it" who is to say you cant lien it and that its not legit? that is simply the point of the lien and if both parties are aware of it i dont see what the big deal is. If you get money from it at closing its not like you are stealing it because you have a loan for it. You are paying the money back either way.
A matter of fact, i was going to do this and my broker asked the underwritter if this was okay and she said it was fine. just to get the lien on there right away. the mortgage co. was aware of it and it and didnt seem to care. (why would they? they make more money)
I am not saying it is not against any rules or anything, but i know people who have done this and it does not seem like a big deal and i have never heard of anybody getting into any kind of legal trouble.
let me know what you think, Ryan
P.S. would you say jacking the price up5k to cover closing cost would be unethical too? In a way that would be considered defrauding the system. Yes it may appraise at that but most appraisers will appraise at or right above sales price. [ Edited by ryand on Date 03/01/2005 ]
i dont know about trying to cheat the lender and all to get cash out at closing. but i have heard from numerous investors who do it for assignment fees and such. for example if an investor has a property under contract and a buyer lined up with financing. instead of him having to do a double closing or assignment of contract then he will just lein the property to avoid seasoning issues. i mean he does have an interest in the property and its on a contract. but obviously the lender wouldnt loan on something with a 20k assignment fee if they would loan on it at all. maybe this is fraudulent, i dont know? but why do so many investors preach of doing it this way? and im not talking about cheating the lender out of money at closing.
I guess I am a little confused. I think Zin made the assumption that you bought this property from a lender as an REO?
How did you buy it? REO from lender or cash bid at courthouse steps or preforeclosure?
Is it through an escrow?
Is it the lenders escrow company?
Are you getting title insurance?
[ Edited by ChrisSanDiego on Date 03/02/2005 ][ Edited by ChrisSanDiego on Date 03/02/2005 ]
What are some others ways that you know of to reduce closing cost Miss Helen. Thanks for your input
ChrisSanDiego - i believe the original post was dealing with getting money back at closing when your using a lender. ryan said to put a lien on the house, and then the topic was changed to weather liening a property is ethical or not. now apparently from what JohnMicheal and Nancy have said, when liening a property in this context to get money back from the lender at closing is fraud. what i was saying is weather its fraud or not if your not bringing financing to the table and are flipping a property. instead of getting involved with all sorts of seasoning issues with your buyers lender, just lien the house for your interest. now ive been told that by a number of seasoned investors and was just wondering if john or nancy thought that was fraud or not?
davese - yes anyone can lien anyones property, unethical contractors do it all the time, and its not like you can stop them even if there wrong. but like someone pointed out there is something called slander of title and if convicted its a major crime. although it seems its not easy to prove or contractors wouldnt do it left and right. you can slander title in a number of ways and not just by leining properties.[ Edited by ZinOrganization on Date 03/02/2005 ]