Leslie, Not to confuse you further, objects that are not fixed to the building are treated as personal property under a seperate transaction. Only your lender can tell you how much value can be assigned to personal property and your loan still be funded. Speak to them and get a firm number before submitting an offer.

Here is a link to information from HUD about the HUD-1 form http://www.hud.gov/offices/hsg/sfh/res/sc3secta.cfm

Leslie,

Gary is right on the button here. If you can show it on the HUD, you are solid. If they won't allow it on the HUD, then it will not fly.

Furthermore, some title companies in the past (not so much now) have set up an "outside of close" arrangement for the owner to get a physical check to you for a dollar amount. That is fraud. Make sure that you are not part of any such arrangement.

A lender will allow a credit of 3% if your LTV is less than 20% and 6% if over. It must be known by all parties in the RESPA statement.

Leslie, I also agree with Larry & Gary. The biggest thing is making sure that your lender is aware of this. As long as the lender is aware of this it is not considered to be mortgage fraud. It is when the lender is not aware of a "side deal", for example that problems will arise.

I also usually handle a situation by having the title company hold money in escrow for such a repair. Then when you have the repairs or in your situation carpet installed, then you hand the bill into the title company and they will pay the contractor for you. Double check with your buyers agent as well as title company to see if they do it the same way as I am accustomed to.

Main thing is lender MUST be aware of this situation.

I hope this information helps! Best Wishes!

HI Leslie,
You need to check with your lender, they all have different requirements. They may want it written up as a credit or a repair, or change the sale price.

Thanks for all the terrific information, you all have cleared up my confusion. So, basically everything has to be written in the agreement that it is cash given for carpet and applicances etc.

Good answer Larry. Sellers can also agree to escrow XX dollars for replacement of carpeting after closing. The Title company would dispurse the money as directed in the agreement.

In general, everything having to do with a transaction must be disclosed and show on the HUD-1 statement or it may be considered mortgage fraud. Your Buyer's agent would be able to help.

Leslie,
Yes they can give concessions at closing. Mostly this will depend on your lender. There are limits to what lenders will allow a seller to give to the buyer. If you have your lender picked out and you are pre-approved this is a question you need to address with them. You will only be allowed a certain percentage to be given to you at closing.

Larry Story
Coldwell Banker Triad

I am not sure how the laws work in your state regarding the seller actually writing you a check. However, you could ask them to take it off the total sales price.

HI Leslie - we just closed on a house where the seller gave the buyer $4000 cash at closing towards roof repair. He could have dropped the price as well. There are a number of ways to handle this - I would leave it up to the attorneys. Hope this helps.