Home Selling in Pittsburgh>Question Details

weberm05, Home Buyer in Pittsburgh, PA

Closed on property and was credited money we might have to give back...need advice!!!!!

Asked by weberm05, Pittsburgh, PA Tue Feb 26, 2013

Just sold a property. We allotted 6% seller's assist. Around $4800 Closing came in at $3900. Attorney gave us back the $900. Realtor thinks we should return the $900 to the buyers. He said it's there money. All our contact says is "Seller will pay 6% of Purchase price toward buyer's costs, as permitted by the mortgage lender" I don't have a problem with that but i dont want to look shady in case we get audited. We are going to pay capital gain........Our HUD statement reflects us receiving the $900, we are 1099'd.

Realtor said if they would have seen the HUD statement in advance, they would have adjusted the selling price to reflect the credit to the buyers. What should I do??

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I disagree with your realtor. You don't look shady. The mortgage lender, by law, can only give your buyer and you so much credit. They woiud not have changed the sale price of the house at the last moment.....too much paper work and resigning. Pay the taxes on the money and go on...or ....see a tax attorney and ask his advice.
Hope this helps.
1 vote Thank Flag Link Tue Feb 26, 2013
Do nothing-as you said- the sentence directly after the seller assist section on the agreement of sale it reads: As approved by mortgage lender! Realtor should familiarize themselves with the tools of their trade before asking for a credit that the bank has already determined they are not entitled to- if they have a beef with anyone its with their lender of choice. Enjoy the 900 dollars, you have done nothing wrong. Also why would a realtor close without reviewing a HUD?

This is a common misconception unfortunately. But its all in black and white on page 2 of every sales agreement we use.
1 vote Thank Flag Link Tue Feb 26, 2013
I would think that if you contractually agreed to 6%, you should return that $900 to the buyers. However, if it was awarded to you on the HUD, the closing agent is required to give it to you. Then you and the buyer would work together outisde of closing to work out who gets the $900. If I were your agent, I would recommend that you forward it to the buyer.

But I think it's kind of subjective as to how and agent would advise you in this case...
0 votes Thank Flag Link Tue Mar 26, 2013
I am very happy that things are working out like they always do. Now go have a drink and relax it will work itself out.
0 votes Thank Flag Link Tue Feb 26, 2013
For one. I am not going to agree or disagree with your agent. There is really not enough info and I am not attorney. Your not shady at all. I would speak with either a tax attornry or a second opinion with a real estate attorney. It is very imporant that agents understand the sales agreement and to learn how to read the HUD form. Its very imporant to communicate with the lender and the closing/title company. I double check my math when I am dealing with a seller assist. I use $$ instead of %%. Not every agent will do what I do. Plus, I will go over the sales agreement and make sure there are no mistakes. If I do not know something I ask my broker because that is what they are there for. Good luck to you!
0 votes Thank Flag Link Tue Feb 26, 2013
UPDATE! Realtor just called.........he said not to worry about the money. It's just more of a headache. They explained it to the buyers.................so that's good. Don't have to worry about anything now.

He said that they are learning alot and realized many companies have been doing things incorrectly lately.

THANKS EVERYONE!
0 votes Thank Flag Link Tue Feb 26, 2013
You can ask the closing company or attorney and see if they will be a part of the transfer back to the buyer. You have already paid them. My bet is they wouldn't touch it without a signed statement from the lender saying it is OK.
0 votes Thank Flag Link Tue Feb 26, 2013
Your Realtor doesn't know what he's talking about. It's NOT their money. Of course, I haven't read your contract, but typically if you're offering 6% it's really "up to 6%" toward closing cost. Or better yet, your Realtor should have specified an exact $$ amount to credit buyers for closing costs in the contract, so everyone is clear. And Lender will NOT allow $$ going back to the buyer. Be glad youre done with that agent!
0 votes Thank Flag Link Tue Feb 26, 2013
There isn't quite enough information to answer this fully, but as Andy says, what's written in the sales contract governs; consult a qualified attorney (and probably tax professional) if there's any doubt.

Buyers cannot receive "cash back" at a closing from seller assist. If the buyers didn't need (or qualify for) the full 6%, the closing agent would only credit them for their costs. That might be what's going on.
0 votes Thank Flag Link Tue Feb 26, 2013
Hello weber05,

I saw your attorneys answer and he is an idiot!

Alan
0 votes Thank Flag Link Tue Feb 26, 2013
Hello Weberm05.

If you give the $900 back you have committed mortgage fraud by doing an off sheet transaction
You honored the agreement of sale and have done no wrong. The person that was at fault was the buyers Realtor and mortgage lender who failed to understand that FHA only allows for the seller assist to include actual closing costs. If the buyer wanted to renegotiate the Agreement of sale once they realized the total amount of closing costs was less than 6% they should have expressed an interest to do so prior to settlement.
Now that everything is signed you are done. Send your settlement sheet to your accountant at the end of the year and let the accountant figure it out.

Alan
0 votes Thank Flag Link Tue Feb 26, 2013
I forgot to mention i spoke with the attorney and he wasn't sure what to do..he said it as up to us to either give it back or keep it. Just handle it out of his office.

Our big thing is what the HUD statement reflects. They should have stopped closing.

I did call the buyer's lender and spoke to her. She said she thinks it is what it is. Closing cost less....

I get a million answer :(
0 votes Thank Flag Link Tue Feb 26, 2013
Short answer: Follow the language that is in the agreement of sale.
0 votes Thank Flag Link Tue Feb 26, 2013
so you're saying...give it back? Which we don't have a problem...just everything looks shady.
Flag Tue Feb 26, 2013
I would speak with your attorney. We normally write up that the credit is determined by what the lender will permit because not all banks allow the full 6%. I always tell clients that the number can change depending on the bank. Good luck.
0 votes Thank Flag Link Tue Feb 26, 2013
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