Seller gift to buyer

[Anonymous]

My husband and I were wondering if the sellers (us) can gift some money to the buyers of our house for their down payment. We are under contract on a home to buy as well, and our sellers have a very specific day they want to close or it will snowball a line of closings not to happen. This moved the closing up on our current house by almost 3 weeks so our buyers might not have all of their downpayment and earnest money by then. We dont want to lose this house because its the only reverse with enough bedrooms for us to be listed in our price range in months. We can afford to gift them $1000 but didnt know if this is allowed.

[Anonymous]

You can pay part of their closing costs. Buyers ask sellers to pay closing costs all the time.

[Anonymous]

We already agreed to pay up to $4000 in closings costs, and they should be under that anyway. Its just the down payment that might hold things up. We just dont want to lose our dream house over $1000. 4-5 bedrooms in our area under $250k is very rare. We snagged it before it even hit the market.

[me12345]

You can pay closing costs, and with some programs even payoff their debts or collections...

However, as a party to the transaction, you may NOT pay or contribute to any part of the down payment.

Do not confuse "Closing Costs" with "Down Payment" they are not the same thing.

Thanks,

[JVille]

You buyer needs to contact his lender and see how much more in Closing Costs the seller can legally pay over and above the $4000 you are already paying. Doesn’t matter what it is labeled at closing as long as they bring in $1000 less in cash. So to be clear the Buyer needs their lender to calculate how much more you can pay on their behalf over and above the $4000 you have agreed too. There are all kinds of rules. You also need to know that just because you want to close earlier not all lenders involved will be able to do that.

[Anonymous]

Thank you for your responses. Both our lenders can have our loans ready to go by the earlier closing date, its just their cash that might hold it up. I will ask my realtor to find out if we can pay extra in closing costs to accomodate them thanks for the info!

[CreditCuriosity]

Can't they wrap part of their closing cost into their loan aka say you raise your asking price by 1k to make up for the difference and if appraises out you are all good and they can take a bit of a APR raise from the lender to lower their closing costs as well or someting along those lines?

[Anonymous]

I talked to my realtor and she said if it comes down to it, we can raise the amount we will pay in closing to cover the difference. We are going to wait until she talks to their loan officer to see if they have it all on Friday after they are paid.