Cash contributions sometimes refer to "pre-payments" to pay off a second mortgage or other liens. I had this happen to a client in September. They had a fully accepted offer on the short sale, signed by the bank and ready to close. But THE DAY OF CLOSING the attorney did a final update and found that there was a newly recorded lien from HUD for $14,000. And the only way to close was for the buyer to bring a cash contribution to pay off the lien.
Since some payments must be made prior to closing to clear title, by example outstanding H.O.A. dues, and cannot be released prior to that, then if the Seller and the Bank are unwilling to pay these to clear title, the only way for them to be cleared is for the Buyer to make a "cash contribution". You could ask for a reduction in the sales price, to counter the cash contribution. But you should definitely find out what this will be used for, and preferably write your check to YOUR closing attorney to handle the money. Don't make the check to the seller, the seller's bank, or the seller's agent or attorney.
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Nate Wolf was recently named a FIVE STAR REALTOR by Charlotte Magazine. He is a top producing real estate sales broker, representing both buyers and sellers. He is a member of the National Association of Realtors, The Charlotte Regional Realtors Association and the Carolina Multiple Listing Services. He is licensed in multiple states and serves all areas of Metro Charlotte from Lake Norman to Lake Wylie and Uptown / Center City to SouthPark and Ballantyne.
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