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tatupu70
2010 Dec 22, 4:32am
I don't think it has anything to do with realtor's commission. It's an easy way for buyers to bump up their downpayment...
elliemae
2010 Dec 22, 7:17am
Maybe it's that the loan is based on the house price - so the buyer's credits can be used for appliances, new roof or any number of things.
I love how the appraisal fee varies from state to state. I paid it as the seller in Vegas, then as the buyer in Utah.
The appraiser is supposed to look into the private agent remarks to see if there were any concessions. But I suspect many agents do not put it in. I look at many listings per day and have only seen listings where the agent actually put in a buyer credit remark about 3 times in the past few years. The appraiser can only use whatever information is available.
FortWayne
2011 Jan 3, 5:13am
seems like a gimmick designed to increase property values. just a scheme of some sort to make bigger commission for realtors.
they don't create wealth, they find a way to trick the buyers to spend more. not sure if that qualifies as honest business.
Please educate me if I'm missing something.
I'm looking to purchase a property soon and while doing my research I have heard of many cases where sellers credited buyers for thousands of dollars. This effectively makes the house cheaper - and reduces the profit for the seller - without reducing the listing agents commission. Is this the gimmick here - buyers get stuck with higher property taxes, sellers get less (but presumably what it's worth), and agents get to collect a slightly larger commission check ... while looking good for selling closer to (or further above) asking price?
Additionally, property values appear to be higher as a result of these transactions - the real worth is what the buyer pays (assuming an arms length transaction), but when looking for comps an appraiser will see the sale price and (I would assume...) not the buyer credits.
Is this only done in cases where buyers can't front the downpayment + MIP (upfront) + lender costs + appraisal fees + etc?
Is this done because listing agents will prefer such sales over competing offers? IE if others offer 100k (asking price) I can come in and offer 110k with 11% (I know this is unrealistic due to limits by lenders) credit by the seller - and the agent might ignore other offers that get the seller slightly more money - but get the agent less commission.