Seller Credit Back To Buyer...?
Hi, i want to make an offer on a 10-unit apt for $330k. However, I'd like to make the loan amount for $350k with seller crediting back $20k to me at closing. I know this type thing is common, but I've never done it.
Assuming a good appraissal and alll acceptances, etc....how does this kind of thing transpire? I've read that the closing agent disburses funds to Seller minus this 20k which is transferred to the buyer. But don't the lenders frown on this? Doesn't it look like the buyer is financing the down payment? (In my case, I want it for rehab.)
Can you do this sort of thing with commercial loans? Is there a better way?
Thanks in advance.
It would work best if you had seller place $20K in escrow, possibly with closing agent or attorney, for express purpose of rehab.
You CAN get cash back at closing (at least in NC) if 1. you are a party to the deal, which you are and 2 if the cash back is disclosed to the lender and reported on the HUD-1 form.
Many times the lender will want to adjust the basis, and subsequently the price you put down in these scenarios.
I think you would be best served placing money in escrow for repairs. You will have to actually use it for that purpose, though.
Good Luck!