Asked by mark8, Huntington Station, NY • Mon Sep 24, 2012
Can earnest money be paid directly to the seller on a contract to purchase real estate. Secondary question: how far in advance can closing date be set on a contract?
I am in the credit penalty box for another 12 months due to a short sale. I have a relative who has agreed to purchase a house and lease it back to me until I can purchase it.
I'm trying to structure a transaction that results in:
-$0 out of pocket expense for my relative
-Does not trigger a taxable event
-Allows me to take down payment credit for the advance money I will be putting up at the time I purchase the house
Here is what I am thinking - please let me know if there are any holes in this or if there is a better way
Purchase price of the house is 350k
30% down payment = $105,000
Relative purchases house for 305k and puts 105k down from his own funds. We then execute a purchase agreement and I pay 105k earnest money. We set closing date no later then 18 months in advance. I rent the house until close.
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