WASHINGTON (MarketWatch) — Question: Here’s a tactic that was used on me as a first-time home buyer: The seller is asked to pay an amount into a fund, and told he can recoup that payment by raising his selling price, which would then be paid by an unsuspecting buyer. I didn’t understand how this worked until after I had put down my earnest payment to purchase the house.
I ultimately found out it was really more of a ploy that results in the buyer paying for it twice, first in terms of a higher mortgage amount (and possibly a higher interest rate) and second in terms of higher property taxes.
What sort of things should first-time home buyers be made aware of and what sort of disclosures should the agents be required to provide to the first-time home buyers? Is this the sort of reason why such programs are only offered to first-time home buyers, because once someone been through this once, it won’t work on them again because they will know what to look for the next time?
WASHINGTON (MarketWatch) — Question: Here’s a tactic that was used on me as a first-time home buyer: The seller is asked to pay an amount into a fund, and told he can recoup that payment by raising his selling price, which would then be paid by an unsuspecting buyer. I didn’t understand how this worked until after I had put down my earnest payment to purchase the house.
I ultimately found out it was really more of a ploy that results in the buyer paying for it twice, first in terms of a higher mortgage amount (and possibly a higher interest rate) and second in terms of higher property taxes.
What sort of things should first-time home buyers be made aware of and what sort of disclosures should the agents be required to provide to the first-time home buyers? Is this the sort of reason why such programs are only offered to first-time home buyers, because once someone been through this once, it won’t work on them again because they will know what to look for the next time?
