Is a Seller Contribution Legal

When a Seller has a Property for sale for a certain purchase price and they get an offer, then the lenders representative or the Mortgage Broker asks them to up the agreed on price to include the buyers loan costs, which often include the actual down payment for the buyer, this is known as a Sellers Contribution or a Seller Paying a Buyers Closing Cost.

Is this Legal? Is it Ethical? Is it Done all the time?

The Bankers say that it is done all the Time.

The Mortgage Brokers Love it, because quite often

this “kickback” “contribution” goes to them.

Is This Legal? They say it happens all the time. I have seen it happen often.

But I do not feel in anyway that it is Legal, Ethical

or good for the Real Estate Consumer in the Big Picture.

This kind of activity makes your neighbors house “worth more”. Meaning that if a Seller gives Money Back or what the Mortgage Broker Likes to Call a Seller’s Contribution than this is added to the purchase price and there is no Mention of this in the MLS sold data that the future appraisal will use to give a loan, a home value on this piece of real estate.

A “Sellers Contribution” or a “Seller paying the Buyers Closing Costs” and than “not really paying it” by actually adding it to the Purchase Price to be included in the buyers loan creates a home value higher than the Seller actually wanted for the home.

There is no way for the appraiser that gives the home equity or home buyers loan on a house that is similar to yours to know that there was a Sellers Contribution or how much that was.

I have seen Sellers contribution that are quite high and actually include a substantial downpayment for the buyer as well as a good paycheck for the mortgage broker which oftentimes the mortgage broker gives the buyer a “kickback”.

Buyers can get a pretend “no or low money down” loan with the magic of the Mortgage Brokers white out and pen.

These types of loans enable a buyer that is NOT really qualified to get into a home loan by “faking” the down payment or the buyers contribution. My guess is that the Sellers Purchase agreement would say Seller’s Contribution, it must be legal right or the title company would not accept this?

With this the Mortgage Brokers file and paperwork to the lender must say something like the Buyers Contribution is… making the lender confident that the buyer can pay something. When really the buyer is contributing nothing.

Maybe lenders simply look the other way, because, well the deal is going through and the buyer is going to soon begin those VERY large interest payments on that No Money Down deal.

In between the lines of all of this, that is apparantly standard of practice, and not minded by the banker, the mortgage broker, the buyer, the appraiser, the Realtors, the Title Company and oftentimes the real estate attorney, there is a False Real Estate Market created and as the years pile on the Real Estate Consumer Loses.

But before that fatal day, the banker, the mortgage broker, the buyer, the appraiser, the Realtors, the Title Company, the real estate attorney, the insurance broker, the lender and everyone else making money from your real estate transaction is making a great living at your future expense.

To Me a Sellers Contribution that Raises the Purchase price to “pretend” that is what the seller is taking while generously giving back money to help this stranger, this buyer is Illegal, UnEthical and Creates a False and Inflated Real Estate Market. However, it does get those involved a paycheck so what the heck Right?

Keep in mind that the Mortgage Broker gets up front fees from the buyer, or shall I say the Sellers contribution. And the Mortgage Broker gets a commission from the lender as with other incentives to push their loans. And on top of this the Mortgage Broker gets a “trailing commission”, meaning they get a yearly amount of money as long as you, the real estate consumer, have your loan at that same lender (for the life of the loan)… WoW.
When you refinance, the NEW mortgage broker gets all that money.

Bottom Line, your Mortgage Broker will want you to give a Seller’s Contribution, a Buyers kick back persay, and they will want this added on top of what you need for the property or want to sell it for. This will not necessarily hurt your bottome line.

You, the real estate seller, will most often get the same, walk away, price either way. But it creates corrupt SOLD data which is used for future loan mortgages, home equity, first time buyers loans and other real estate values in the community.

The buyer should not want this for it is an over inflated loan for the benefit of those getting commissions from it and is not really beneficial to the real estate buyer. Most don’t care, they simply want to get into the home.

You will get to decide and I know from what I have seen that the real estate consumer will most often choose to take the deal. The seller needs or wants to sell and the buyer wants to buy. In that, it makes the parties to the transaction lots of money. And seemingly, that is the point…. You Decide. Find out more about the Truth about the Real Estate Industry at www.SavvyBroker.com I am Telling ALL in my Real Estate Industry Whistleblower Blog. You NEED to Know this Stuff.