Washington D.C. · Member since 2009 · 14 posts · 0 votes
I am 99% of the way through a deal, closing on Monday (today is Thurs)... but the seller just pulled something I have not seen before:
We negotiated that the seller paid 12k towards "Closing costs and Pre-paids"
They are now saying that they will only cover 9k, the difference is that the taxes for the year were already paid by the seller and therefor we are paying them back the balance and they don't consider that a pre-paid. Our lender is fighting them and said they have never seen anyone try this... they do sometimes try to exclude pre-paids, but that that is why we were specific in our negotiation about that.
Searching around I could not find anything on this, the original 12k was not even going to cover everything and we still had to bring about 3k more to the table...
Advice would appreciated. Oh, and this is a Homepath loan, just FYI.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
14y
Imo, taxes are not a pre-paid or a closing cost, they are a pro-ration of an expense. Maybe some consider them the same, but I wouldn't include taxes as part of closing costs.
That said, if they agreed to $12K, noreason you shouldn't get all of it, one way or another.
Involved In Real Estate · Columbus , OH · Member since 2010 · 68 posts · 23 votes
14y
How does the contract read? I was involved in a deal that the offer used the wording "up to $12k"
That can make it tough to agree on what really is a closing cost.
Good luck with the deal.
Washington D.C. · Member since 2009 · 14 posts · 0 votes
14y
We are still going back and fourth finally got the HUD and it is funny the taxes are in a section labeled "To be paid in advance"....if that does not equal 'pre-paids' I don't know what does. My mortgage guy is at a loss, as he sees this as 100% clear and has never had anyone try to make this argument before.