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Watch out for Investment Property or Condo Kickbacks

I noticed the other day while checking out 'Referrals' that an investor group is advertising that the buyer will receive $10,900 designer credit 2-3 weeks after closing, in essense, a 100% return of their downpayment. That is a kickback or inducement to purchase and to the best of my knowledge, illegal. If you are selling property and you have knowledge that the developer or investment group is offering this, don't think that you are innocent in this transaction.

Posted by Molly Lionberger on 03/18/2008 06:53 AM

Comments (6)

inducement to purchase alert

6 Comments on Watch out for Investment Property or Condo Kickbacks

MAR

2008

Great Post, Thanks for the information. I'll keep it all top of mind. Keep up the great blogs

Its more under RESPA law and when disclosed to the lender on contract and on the HUD it is legal. Just one key word...Disclosure.

Disclosure is the key word...

Manny Reynaldo,PA,CIPS,TRC Prudential Florida WCI Realty

Mreynaldo@2bocahomes.com

I can't imagine an Underwriter allowing a 100% return of downpayment, even if it is disclosed, on investment property.

Thanks for the information, but there are also loan companies that allow the seller to pay the first 6 months of the buyers mortgage payment too and that is legal. So long as it is disclosed and in the contract and the title company and the bank sign off on it. But, full disclosure is the key!!

Molly, the three most important words in real estate, "Disclose, Disclose, Disclose". If it can go on the HUD-1, it is legal. Waiting 2-3 weeks after closing does not make it okay.

Great Post!

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