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What Sellers Need To Know About Receiving Offers

October 16th, 2006 categories: Fraud, Loan Fraud, Real Estate, Realtor, Seller

In today’s Real Estate market we are seeing quite a few Home Buyers ask for help in closing costs often referred to as recurring, non-recurring costs.

This amount should never exceed 6% (which? is outrageously? generous). Money for closing costs should always be addressed on the first page of the Purchase Contract.

If you receive an Addendum asking for funds to be credited to the Home Buyer, this is probably fraud. The only time that additional monies are ever to be addressed outside of the Purchase Contract are for items found during the Home Inspection process.

Sometimes, the seller would prefer giving the Home Buyer credit at Close of Escrow rather than repairing items found in the Home Inspection or Pest Inspection.

It is imperative that the Home Buyers‘ Lender receive all paperwork having to do with money. Although you have no control over what is sent to the Home Buyers‘ Lender, you should have the knowledge and question the legitimacy of the offer.

If you hired a new agent to represent you it is possible that they are not acquainted with this. Real estate, like in any business, has those to watch out for and those that are honest.

Some agents may send an Offer and an Addendum asking for additional money, be wary of this. Most of us know that at the time of escrow when the monies are tabulated and a HUD statement is generated, these funds would show up. That is not the time that you want to find out that the deal has gone south because of money that the Lender was not aware of. You need to take notice of this at the beginning rather than the end.

Recently, one of my Sellers was sent an Offer by a “questionable” agent? The Home Buyer was asking for money back from the Seller to be given toward the Home Buyer’s Closing Costs. The amount was $15,000 and was specified on the 1st page of the Purchase Contract (which is fine).

However, the agent also sent an Addendum at the same time as the Purchase Contract where he asked for an additional $30,000 for “Home Improvement“. This was a “red flag.” When I asked the agent if he planned on sending this Addendum to the Lender, I was told “no.”

In this case, this would be considered Loan Faud. Not to mention that my Seller’s house needed NO “home improvement” whatsoever! The agent went on to say that his “Title company handled this sort of thing for him all the time.” That’s a little disheartening, if true. Needless to say, my Sellers accepted a different offer which was legitimate and better.

For further information and more about loan fraud.

Sellers, remember, experience doesn’t cost, it pays!

Do you have a Real Estate story you would like to share?