Legal Question in Real Estate Law in Illinois
closing costs negotiation
We have made an offer to buy a condominium, and the offer stipulates that the seller will pay closing costs. However, the loan for which we qualify requires us to borrow the purchase price plus the closing costs and to pay the closing costs. Is it legal for us to pay closing costs with the loan but be reimbursed by the seller for those costs? We have been told by our mortgage agent that this happens all the time and simply requires a separate contract between seller and buyer, but the seller's lawyer thinks that this is illegal. Thank you for your help.
3 Answers from Attorneys
Re: closing costs negotiation
Why he would think it illegal is beyond me - you are free to contract for whatever splitting of costs you so choose. Often what happens at closing is that it is reflected as a credit to you in the closing statement. There are many other ways to achieve what you want including a separate contract but I would prefer an automatic credit at closing.
Re: closing costs negotiation
If I understand your question correctly, I would have to agree with the seller's attorney. At closing you will sign at least one document which effectively states there are no under the table deals between the parties. To have certain fees settled in the parking lot could be construed as loan fraud.
Re: closing costs negotiation
I concur with my colleage Mary McDonagh; you can get a credit on the closing statement from the Seller for closing costs; often, this is provided for in the real estate sales contract. It would appear to me that you REALLY need the services of a competent real estate attorney, and are not represented. I would RUN, not WALK to hire one before the closing. GOOD LUCK!
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