How do allowances work in real estate?
Posted on May 16th, 2010 in Renting & Real Estate | 2 Comments »
fun_runner_girl asked:
Our mortgage lender offered us a $3000 appliance allowance for the home we are in the process of purchasing. 3 days before we found this out, we bought appliances ourselves. Can someone tell me how real estate allowances work? We live in Wisconsin. The home is a foreclosure and does not have appliances. The lender thought this allowance would help us out. We close next week. I can return these items before they are delivered in 2 weeks.
Chicago Il Real Estate
Our mortgage lender offered us a $3000 appliance allowance for the home we are in the process of purchasing. 3 days before we found this out, we bought appliances ourselves. Can someone tell me how real estate allowances work? We live in Wisconsin. The home is a foreclosure and does not have appliances. The lender thought this allowance would help us out. We close next week. I can return these items before they are delivered in 2 weeks.
Chicago Il Real Estate
2 Responses
Chula Vista Ca Real Estate
at the closing you will receive a $3,000 credit, or reduction in price so it will offset what you just paid, the credit will come in cash. It will reduce the amount of cash you have to bring at cloising>
you took a chance by buying before the closing. closings fail all the time so I hope yours goes through.
Peru Il Real Estate
Interesting – It’s not really legal for a mortgage lender to offer you an appliance allowance, so that’s something that you may want to check on. Are they the seller of the property as well?
An allowance is usually offered by a seller to offset the costs of things like appliances, carpeting, etc. They are also offered by builders so the buyer has a budget within which to stay when selecting items for the home.
The allowance will show up as a credit to you on the settlement statement, and will reduce the amount of closing costs and down payment you will need to bring to closing. Since you have already bought these things, you should keep them and install them in your new home.