What would have been sensible is for you to put on a new roof and use your homeowners insurance to pay for it.
And besides if contracts have been signed and closing set - you can't really change the terms of the contract now. If you do decide to try a change - buyers have every right to back out. And get any earnest money back. And could even sue you for breach of contract.
So now - just who is clueless and needs to go back to elementary school? Sis..
The buyer will not be able to get a loan for the higher amount, and this is actually a form of mortgage fraud. If the lender discovers down the line that this happened, they can accelerate the loan on the buyer. Not a good thing.
If you sell for the lower price, you will be paying less in real estate commissions, so that is the better option if they buyer is willing to accept the responsibility for the roof repair. You (and the buyer) also have to hope that this needed repair does not show up in the appraisal the buyer's lender will order; most lenders would require the roof be repaired before they will lend.
Actually, $10,000 is a ridiculous price to pay for a roof! The best thing to do (it's too late now) would have been to hire a contractor to replace the roof, then sell the house for the full contract price without having to lower it or give any money back at closing.
A roof costs about $6000 these days, so you just gave away $4000 to the buyers. I'm sure they're happy!
Most buyers are getting a new loan to buy your house. Most mortgage companies do not allow a seller to give a chunk of cash to the buyer at closing because it looks to them like it makes it a more risky loan. To lie about the cash is bank fraud. You are allowed to pay up to a certain amount toward the buyers closing costs and that might cover part of this. Also if the new roof is a condition of the loan the buyer may be required to have it installed prior to closing.
It must be a huge roof to concede $10k. The best idea is to keep the house price low in most scenarios. Increasing the price of the house could mean increased capital gains taxes for the seller, and a high property tax basis for the buyer because they will likely be paying property taxes on whatever the house sells for, and that taxes on a $500k is less than taxes on $510k. Plus artificially increasing the price on the property may make it impossible for the house to appraise correctly.
No, it is not more advantageous. Assuming a 6% real estate agent commission, cash back as you indicate costs the seller $600 in extra commission. There is also the possibility that capital gains taxes might be higher if the seller does not qualify for an exemption.
get a roofer.....they deal with the insurance company....free roof.....then again, they can pocket 10 grand...you're just giving the realtors 600 bucks commission.....buyers...invest the 10 grand, save more money with 5K insurance deductible...basically, free insurance
technically not allowed - you might have been able to work out something under the table before formal offer was accepted and sent to closing agent - kind of too late now
Our house is under contract and we're closing in about 30 days. It needs a new roof, so we lowered the sale price by $10,000. Isn't it more advantageous for all involved (regarding the contract/paperwork) to sell the house at the higher price and give the $10,000 back to the buyers at closing? Advantages/disadvantages to all parties? Thanks!
