Expert: Sue Bernstein - 4/24/2006

Question
I 'am currently working on a real estate deal. The seller is willing to pay money (from closing proceeds)after closing for purchasing the property. Is this illegal? What is your experience with this? Thanks  

Answer
Dear Ron,

It may not be illegal but it may not be acceptable to your lender.  The real question is 'why is it being paid outside of escrow and not as a credit through escrow?'  If it is because the lender won't allow it you would in essence putting your loan in jeopardy if the lender should find out.  Whatever deal you make make sure it is in writing.  Generally, lenders will allow a certain amount of credit given to buyer and the amount depends on your down payment.
I hope this helps and good luck.

Sue Bernstein
www.SueBernstein.com