Cash back incentive

**mynt2007** · 10-02-2007, 11:40 PM

I recently dove into real estate.
I'm working for a broker and we're currently offering properties with large cash back incentive that is given after closing. (2-3 days after). It CAN be given to the buyer as a way to reduce the settlement costs --but this requires pulling strings with the lenders --ie: proof of 'gift money'-- as the bank wants to know where the money came from.

How do I properly market this?
I have potential buyers say the deal breaker is their worry of me running away with their money. Completely understandable I know...

Anyway, I'm a student, and completely new to real estate. I'm lost here!! help

**Mike Taylor** · 10-03-2007, 03:58 AM

I also offer a cash rebate. If your people are worried about you running away with the money, let me make a few suggestions.
Will your broker allow you to bring a post dated check to closing for the rebate?
Other than that, do have past clients that would be willing to either write some testimonials or be willing to accept a call from someone to verify that you do in fact give money back?
Do you have an agreement that you both sign that lays out the rebate?
Why don't you ask your broker to join the BBB? Just some thoughts.

**REbuyersgroup** · 10-03-2007, 10:04 AM

This is nothing new, and there are a lot of agents facilitating these transactions with little knowledge of the consequences.

Have you heard of federal prison?

Cash back to a buyer post closing that is not disclosed is illegal.

If you are giving cash back to the "buyer", it must be disclosed on the HUD or though contractual disclosures in the contract.

If the buyer does not disclose the addendum to the lender, they will be held accountable in the event of a default and will be considered fraud.

There are legal ways, and I recommend seeking the advise of an attorney.

Be careful...