Short Money to Close or to use as a down payment? There are some loan programs that allow a sale of personal property. Please be careful when doing this to qualify though, there is paperwork that has to be retained and submitted. I just had a closing where the buyer sold a hot tub to his mother in law... why we didn't just do it as a gift is beyond me. I didn't know the kinship until the end of the process. Well here is what I had to have:
1. An appraisal of value - now I deal with real estate appraisers every day; this was so new to me and way out of my arena. I was able to obtain this from Mr. Regan Skinner of The Rec Warehouse in Macon, Georgia who kindly went out of his way to write me a letter of value. SO IF YOU HAVE A CLIENT WHO WOULD LOVE A HOT TUB... (smile).
2. Proof of ownership prior to sale. Some people are great with paperwork and have all their big ticket items filed away neatly and orderly. Luckily this was the case with my client. The hot tub was 2 years old and he had all of his original receipts and financing documentation.
3. Bill of sale. Simple enough completed and signed by all parties.
4. Proof of payment received...and ability to buy (this means a cancelled check - and if it was a transfer of money, then the (in this case) buyer of the hot tub had to show their banking statement (going out) as well as the receipt into the hot tub seller's account. NOTE: this can get very tricky because in my opinion, I don't have a legal right to request this information...as they are not my mortgagee and have not signed any disclosure documents. This however was required by the FHA underwriter that got my package. This is the same type of situation with Gift Funds where the donor has to show ability to give.
5. If like in this case the hot tub was financed... evidence that the hot tub was paid off with the sale of it. This would be a letter from the collateral holder clearing the hot tub for sale. (it also cleared the debt from the DTI).
It is definately a lot of hoops to jump through - just beware of them, so they don't trip you up.