It is very common for a buyer and seller to negotiate a seller credit in lieu of repairs after a buyer does a home inspection. Most sellers do not want to bother with doing a small amount of repairs, and some may not have the money until after they go to settlement, so they negotiate a credit and offer to pay some money at settlement for these repairs. The problem comes when the Realtors word this incorrectly in the contract and end up causing last minute problems.
It is important to know how much a seller, or any interested party (i.e. a realtor, builder, or seller) can contribute to a buyer’s closing costs. Many people get confused as to what is allowed, and some realtors write up a sales contract with dollar amounts that are not allowed per mortgage guidelines, which will cause problems with the loan. Below are the current maximum seller financing contributions allowed: Read the rest of this entry »