Legal Question in Real Estate Law in New York
Im buying my grandfathers estate in NY currently owned by my Mother, Aunt and 2 Uncles. Say the sale price is $200,000 my Mother is waiving her inheritance as $50,000 gift of equity. Im using that as down payment to avoid PMI. My question is how do I figure in a sellers concession to help pay for closing costs??
2 Answers from Attorneys
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Find out from you loan officer the percentage of the seller's concession that the lender will accept (typically up to 6%). Then increase the purchase price of the property by that amount and note in the contract that the seller will credit the same amount to the purchaser at closing as a contribution toward the purchaser's closing costs.
However, keep in mind that the success of structuring this deal in this manner will largely depend on whether the lender will appraise the property at the increased amount. If the appraisal is lower than the increased purchase price, then the seller's concession must be reduced accordingly by amending the contract.
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