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Answers (5)
- Jim Simms, "JimSimms"
- Contributions:39
The escrow deposit has nothing to do with the sale price being lower or higher or taxes to either party. It is a deposit, there is nothing wrong with using the funds for closing cost or prepaids as long as it is done at the close of escrow. If it is allowed to be withdrawn before then the seller's position is weakened.
- Antoine Pirson, "aepirson"
- Contributions:94
There are several reasons. The buyer does not have ALL of the closing costs available. The buyer is buying down the loan with money from the seller out of escrow. If the property is financed for 90% ( as an example), the loan will still be on 90% of the full purchase price, not on the full purchase price minus the 10K.
Etc , etc.
Antoine
Etc , etc.
Antoine
- Linda Rozales, "Lrozales"
- Contributions:245
It benefits the buyer who does not have a lot of money to buy a home. You have to remember that when buying a home, you are not just preparing for the down payment but also for the closing cost which is approximately 3%. If a buyer has limited funds, it would benefit the buyer to add the closing cost to the loan by asking the seller to provide the credit for the closing cost. There is definitely no benefit to a buyer who has lots of money.
Hope this helps.
Hope this helps.
- L.L.A.
- Contributions:7
A prospective buyer has asked to receive money out of escrow rather than lowering the purchase price of the home. What benefit would the prospective buyer receive from this? The sellers will pay more in taxes and the buyer will have a higher property tax basis, so I am confused what the benefit of taking money directly out of escrow would be.
- Anne Barrier, "abarrier25272648"
- Contributions:67
I'm not understanding the exact circumstances. Can you elaborate?
Why would a buyer ask for $10K be taken out of escrow rather than lowering the price 10K?
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