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  #1  
Old 10-14-2011, 10:45 PM
zhencai zhencai is offline
 
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Question What is purchase price

Short sale, contract price $500,000. However, buyer agrees to pay $30,000 to 2nd lien holder. I'm going to explain this but what should I put on page 1, under Contract Price? $500,000 or $530,000? I would think $530,000. Any thoughts?

Last edited by zhencai : 10-14-2011 at 10:57 PM.
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Old 10-14-2011, 11:27 PM
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Originally Posted by zhencai View Post
Short sale, contract price $500,000. However, buyer agrees to pay $30,000 to 2nd lien holder. I'm going to explain this but what should I put on page 1, under Contract Price? $500,000 or $530,000? I would think $530,000. Any thoughts?
Contract price is $500,000. The $30,000 is a buyer concession.
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Old 10-14-2011, 11:30 PM
NORTON NORTON is offline
 
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Contract price is $500,000. The $30,000 is a buyer concession.
I was of the opinion a concession could reduce payment from borrower and or reduces net proceeds to seller...if so, neither of those situations occurred in this example.
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Old 10-14-2011, 11:40 PM
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I was of the opinion a concession could reduce payment from borrower and or reduces net proceeds to seller...if so, neither of those situations occurred in this example.
I'm thinking a concession can go either way. A seller concession or buyer concession.

From Webster: Concession: something done or agreed to in order to reach an agreement.
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Old 10-14-2011, 11:43 PM
NORTON NORTON is offline
 
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I see your point now, didn't at first. I'm thinking this situation hasn't experienced any concessions....it merely requires the approval of 2 note holders (sellers) who will grant their approval for 500k & 30k, no concessions involved.
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Old 10-14-2011, 11:58 PM
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I see your point now, didn't at first. I'm thinking this situation hasn't experienced any concessions....it merely requires the approval of 2 note holders (sellers) who will grant their approval for 500k & 30k, no concessions involved.
Aaah, I see. Point taken.
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Old 10-15-2011, 12:40 AM
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Contract price is $500K and this is what you report on the appraisal. The concessions need to be reported as buyer concessions and taken into consideration when valuing the property.
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Old 10-15-2011, 02:13 AM
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What does the P&S list the total price payed, and in what manner? That would be your answer, in my opinion. Either way I think you're ok as long as you explain it. If you're doing this on a 1004 there is enough room to briefly note the situation and point the reader to the addendum. By putting such information on the first page I think you'll be fine whether you put 500 or 530 on the actual line.
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Old 10-15-2011, 06:54 AM
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Clarify .. is buyer paying $500,000 and $30,000 of that goes to pay off the second mortgage or is (s)he paying $500,000 to the seller in addition to paying off the second mortgage?
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Old 10-15-2011, 07:51 AM
BRCJR BRCJR is offline
 
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Clarify .. is buyer paying $500,000 and $30,000 of that goes to pay off the second mortgage or is (s)he paying $500,000 to the seller in addition to paying off the second mortgage?
The above is the question that must be answered.

Is the second portion of this equation in writing? Are there actually two contracts? or a clause in the first, possibly?

Typically, leinholders do not just shake hands, in todays world, for an agreement such as indicated.

I do not see any concessions in this transaction, as presented.

I see either a sale of 500 or sale of 530 and that appears to be the 64,000 dollar question.

If I were the buyer, would I be out a total of 500 or 530? If the latter the "contract" is misleading.

What will be recorded as sale price, legally?
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