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Contract Looks Fishy |
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Edith, My husband and I are selling our house for $159,900. We received an offer that seems a little strange. The potential buyers wrote the contract as such: purchase price $195,000 with seller paying $11,750 toward closing cost and with a "seller carry back" of $29,250 and balance due at closing of $164,750. Even though our price is $159,900 the buyers are seeking a loan for $164,750 and will not put any money down since the down payment is included in the above figures, somewhere in this paper shuffle. Is this legal? |
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By all means, consult your own lawyer before signing anything. Buyer and seller can agree on almost any financial arrangement they want. If the buyers really mean to buy for $195,000 and make payments to you on a second mortgage, the only hurdles would be whether the bank accepts such a down payment arrangement, and -- a big question -- whether its appraiser finds the place is worth that much. What would be illegal is showing a phony contract to the lending institution -- in this case one implying that the purchase price is $195,000, if they're really only planning to pay you $164,750. Or $159,900. Or whatever. Lying to a federally- chartered bank – by buyer or seller -- is a felony. It might be fun to insist that because the buyers signed this document promising to give you that fictitious second mortgage, they could be obligated to pay you on it after all. |
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Edith
Originally published on October 16, 2005 |
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