Can I offer cash back when selling a house?

I would like to sell a rental property. It appraised for $42,500, and I am asking $39,000. I would like to offer $2000 cash back at closing, but someone told me it was illegal to advertise cash back. I thought this would be okay since the loan amount would still be less than the appraised value of the home.

Can I offer cash back when selling a house?credit

That is not the way lenders think, and given the fact that most folks are looking for 100% financing, is actually counterproductive.

When you offer the house for $39,000 with $2000 back at closing, most lenders will see that as a $37,000 purchase price, because the buyer only paid a net of $37,000 for the property, and so they will only loan money based upon that $37,000. Great if your buyer had a down payment of at least $2000 anyway. A real obstacle if they don%26#039;t. Remember: valuation is LCM, Lesser of Cost or Market. Cost is purchase price, in this case $37,000. Market is appraisal, $42000, not that it matters. It could be $42 Million, and the purchase price would still be $37,000.

Now one of the other answers did have a good resolution: offer $2000 towards their closing costs. That%26#039;s acceptable to lenders, where giving cash back is not.

Can I offer cash back when selling a house?

loan

I don%26#039;t see why not|||I have been house hunting and have seen things listed for cash at closing. Sometimes they call it a decorating allowance- sometimes closing cash. I am in Illinois. Maybe it varies by state?

I thought of actually giving the buying agent 2K as well. The market is tough right now.|||Why don%26#039;t you just offer to pay $2000.00 in closing costs? It would be giving them the money, but legally.|||Yes you can but you have to label it as a %26quot;Seller Credit due buyer%26quot; for whatever you and the buyer agree upon.|||The easisest way is %26quot;Seller will pay $2000 towards buyer%26#039;s closing costs%26quot;....that way nothing fishy. Some lenders DO NOT allow the buyer to get cash at closing regardless, so by paying the buyer%26#039;s CC%26#039;s, you get around that.|||cash back to whom? Selling agent/buying agent/buyer? Make this really clear where you want the 2k to go. the 2k can be an incentive for the agents to bring the property in at list price or use the money to give to the buyers for closing costs. Again, make sure you state where the money is going.|||Yes, only if you state that it as an incentive to the buyer. Make sure you state that it can go %26quot;towards any closing costs, prepaids, or any miscellaneous items%26quot; to cover your butt...|||That%26#039;s a no-no unless you do it under the table. The cash back at close can%26#039;t appear on the final HUD, but you can offer $2,000 towards the buyer%26#039;s closing costs and pre-paids, though most loans limit it to 3% or 6% of the sales price.|||Why?

You are selling a house for $2500 less than it is worth, and want to give them another $2000.

You are giving away $4,500.

Why not sell it for $42,500 since it appraised at $42,500, and offer to carry the mortgage secured by a trust deed or a land contract.

You can charge a fair interest rate and make more than $120,000 over the years on the mortgage, and still reposses it if they don%26#039;t pay.|||Anyone directly involved in a real estate transaction can give monies to either party, as long as it is disclosed to all parties.|||Why don%26#039;t you just ask $37000 for the property or pay $2000 toward the buyer%26#039;s closing costs, or provide a $2000 decorating allowance. The title company will not allow the buyer to walk away with the $2000 cash, as that is illegal. The buyer can only receive money back in an amount that is equal to or less than what the buyer %26quot;put in%26quot;, i.e., the buyer puts down $500 earnest money, so the buyer can walk away with $500 at closing.|||You can offer to help with closing cost of up to 6 percent of the loan amount. This will pay for the buyers closing cost associated with the loan. Saves their money...for things for the home.