There have been some situations in the past where a repair or job at a home being sold will not be completed before the closing date. Years ago, we would have the seller write a check to the vendor of the buyer's choice for the work to be done. This check would be given to the buyer at closing. In theory, the buyer would then give the check to the vendor doing the work once the job was complete.
We can't do this anymore. The problem was that the buyer would get Uncle Manny to do the work and they would split the proceeds of the check. This was a definite no-no for the lender. It constituted Mortgage Fraud.
Before we did this, big dollar gift cards were given to the buyer from the seller. Gift cards from Lowe's and Home Depot were very popular. However, the same shenanigans began happening and this was shut down as well .
At one point we were able to have money left with the closing attorney in an escrow account. They would send out the money once the job was approved by the buyer. They no longer want the liability so this has all but ceased as well.
So, the moral to this story is to get any work needed by the seller done before closing. If this is not possible, reduce the sales price in accordance with the value of the repair.
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