Uh-oh! Seller Concessions MISHAP!
I heard yet another story this week that made my jaw drop. So, of course, I just had to share it with you! Most home loans, with exception of a very few, require a down payment. This down payment is considered a “minimum cash investment”, which is required by Lender. Seems pretty fair to me! Well, unless you know all the rules and regs, it can get pretty dicey. Any typical buyer isn’t going to know all the stipulations of their loan, but most of the details will be explained to them by their loan officer and Realtor. Unless of course…the loan officer and the Realtor haven’t stayed up on continued education. <Cue the dramatic music>
It was the day of closing and the title agent asked the buyer for her down payment.
“What down payment”, she asked?
“The down payment that is required for your loan”, said the title agent.
“Oh, I got 6% seller concessions in the contract. That covers my down payment”, the buyer exclaimed.
What is wrong with this situation?! Although with an FHA loan, you CAN get 6% contributed from the seller, the buyer is still required to have 3.5% down in order to purchase the home. The 6% sellers assistance CANNOT be put toward the down payment. How in the world this buyer got to the closing table without her loan officer or Realtor notifying her of this is beyond me! The poor girl was in tears when she realized she needed another $3,600 in addition to her $1,500 Earnest Money Deposit. She either gets the money or she can’t close and this whole deal is blow. All because of the lack of knowledge. (This is why Property Guiding LLC exists! To educate people so that this kind of thing doesn’t happen!) Luckily, she was able to get the cashier’s check and they were still able to close. If she had to get the funds gifted, they would have to be “seasoned” showing proof in her account for at least two months. It was a happy ending with one giant bump towards the end of the road. Moral of the story…do your homework and educate yourself. You don’t want any surprises at the closing table!
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Realtor® | SWFL Region
Treeline Realty Corp.
239.292.9404 (c) | 239.989.0138 (f)
“Buy or Sell…Think Pell!” ™
Posted on August 30, 2012, in Real Estate and tagged Buy a Home, Buyer, Closing, Closing Costs, Earnest Money Deposit, FHA, Fort Myers, Kristen Pell, Lender, Loan, Mortgage, Property Guiding, Real Estate Biz, Real Estate Financing, Realtor, Seller, SWFL Real Estate, Title Agent, Title Work. Bookmark the permalink. Leave a comment.