E333 Seller Credit When Selling Probate Real Estate

<p>This happens when the buyer agrees to a higher contract price, but the seller also agrees to credit back a set amount to the buyer, so the net purchase price is lower.</p> <p>For example, if the buyer wants the house for $250,000, they would set the contract price at $300,000 with a side agreement that the seller would credit $50,000 on the closing statement, effectively making the price $250,000.</p> <h2>Why not just a price reduction?</h2> <p><img class="aligncenter size-medium wp-image-44447" src= "https://anthonyspark.com/wp-content/uploads/2023/08/Why-not-just-a-price-reduction-300x169.jpg" alt="Why not just a price reduction?" width="300" height= "169" /></p> <p>Co-ops (and sometimes condos and homeowners’ associations) want the closing price to be (artificially) higher to maintain their average price per square foot. They don’t want records to show that a unit sold for significantly less than other units, because, in theory, it will eventually drag down the value of the building. Even though a lower price is reasonable for a probate property that needs major renovations, it doesn’t benefit the co-op.</p> <p>Sometimes cash buyers and investors want the recorded price to be higher, so they can show flip buyers a slimmer profit margin. For example, an investor pays $250,000, hoping to flip it for $350,000. When the investor goes to sell the property, the buyer can check the public records to see what the investor paid. It will show that the investor is trying to make a $100,000 gain. If the records show that the investor paid closer to $350,000, it won’t look like he’s making a large profit.</p> <h2>What can a seller credit be used for?</h2> <p><img class="aligncenter size-medium wp-image-44448" src= "https://anthonyspark.com/wp-content/uploads/2023/08/What-can-a-seller-credit-be-used-for-300x169.jpg" alt="What can a seller credit be used for?" width="300" height= "169" /></p> <p>Non-professional executors and heirs are sometimes worried that the situation seems sketchy. They wonder if they are really allo