Legal Question in Real Estate Law in Illinois
Is this contract Legal?
I have a buyer interested in purchasing my house. It is listed for 174,900 and she wants to offer 172,000, which would be acceptable to us. Here is my question:
On Friday she faxed us a contract to make her offer valid, warning us that she is getting "creative financing" and not to be allarmed by the figures on the contract. Well, we were allarmed alright.
The contract reads:
Purchase price 260,000
Earnest money 100
Sellers second mortgage 13,000
Due at closign 246,900
Sale contingent on buyer obtaining 170,000 mortgage.
Where is the 172,000 we agreed on? Isn't it illegal to inflate the purchase price like that? What about that second mortgage? She never asked us if we would carry back a mortgage? Creative financing is one thing, but this seems like fraud to me. Any advice would be appreciated.
By the way, we have not signed anything and will not until I hear back from my attorney.
Thank you very much.
2 Answers from Attorneys
Re: Is this contract Legal?
The contract is a fraud and can create problems for you if financing is obtained through a bank or other financial institution. Where do you live? I would like to see a copy of this "contract".
Re: Is this contract Legal?
You mentioned that you will not be signing the agreement until it is reviewed by your attorney. That is an excellent course of action. It would appear that the buyer is attempting to get their mortgage lender to lend 100% of the purchase price. Even if there weren't some obvious fraud problems, I don't think the appraisal will come out high enough, unless of course you are asking significantly less than the property is worth. Please consult an attorney before you sign anything.
Related Questions & Answers
Looking for something else?
10,200 active attorneys ready to answer your legal questions today.
Featured Attorneys
Earn additional revenue and grow your business.
