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can the buyer pay the down payment directly to the seller?

by tbliss57689 from Lake Havasu City, Arizona. Feb 19th 2016 Reply


Yes. Call me 214-432-9047

Feb 19th 2016
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Ralph Richard Guertin (ralph@absolutelowrates.com)
#136 ranked lender in Florida - 644 contributions

Wow, 15 years and never heard that question. Good luck with that...

Feb 19th 2016
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Gary Ardesson (gardesson)
#103 ranked lender in Arizona - 7 contributions

Yes you could, however it is not recommended. About the only time I would consider it is if there are no Realtors involved and even then I do not believe it is a good practice. In the event any issues arise it may be difficult to obtain a refund if the transaction is not consumated without taking legal action.Lenders for the first mortgage are going to require documentation of the transfer and receipt of the down payment funds. They will require documentation of the down payment coming from your account and going into the seller's account.It is highly recommeded that you utilize an independent third party (normally) the escrow company to hold any earnest money or down payment funds. Your written contract should allow for a refund if financing is not available or if an appraisal reveals any property defects that would cause you to cancel the transaction.I do not recommend giving the down payment to the seller.Gary ArdessonMohave State Bank928-302-5156gardesson@mohavestbank.com

Feb 19th 2016
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Russell Ideishi (rideishi)
#104 ranked lender in Arizona - 2 contributions

If the down payment funds are well documented, then yes, such as in the case of a Lease-Option where the down payment was paid at the beginning of a lease, however, if it is at the time of purchase, it may be better to park the down payment at a 3rd party Escrow and Title company until the purchase/loan is approved and completed. If the loan is not approvable, it MAY be less complicated to have earnest money refunded from an Escrow company rather than the seller.Give me a call to discussRuss IdeishiMohave State Bank AVP928-302-5152 (Direct)928-230-6065 (Cell)NMLS# 451309

Feb 19th 2016
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William J Acres (William_Acres)
#1 ranked lender in Arizona - 8,045 contributions

Yes.. but you shouldn't.. If your applying for any type of conforming loan, then the only monies that might be considered would be any monies you paid to the seller such as lease option or rent to own funds.. I say that the lender "Might" allow it, because some lenders don't.. right before the mortgage crisis, this was an area heavily stained with mortgage fraud.. sellers would fabricate lease option documents showing the buyer put all this money down so they could get their new loan with out putting anything down.. Since then, new guidelines are in place and certain lenders just disallow these types of funds to be used as down payment.. If you' re purchasing a home, you should absolutely be using a title or escrow company.. You don't pay the seller directly.. you pay the title company and the title company pay's the seller.. If you do it any other way, then my guess is that there is something fishy going on.. and you could be in danger of losing your money.. "Buyer Beware!!".. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com NMLS# 226347

Feb 19th 2016
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Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 3,568 contributions

Yes... and no... At the time you write the offer, you can provide an earnest money check equal to the required downpayment, so in effect, giving them the money directly early on. But why? That is completely abnormal to how things are normally done. Obviously you have a reason for this question. What are you trying to achieve?

Feb 19th 2016
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Korene Clopine-Seaman (korene)
#69 ranked lender in Arizona - 83 contributions

Yes, But I would not recommend doing so. I recommend you use a title and escrow company to keep everything well documented and without a bias in the transaction. All lenders are going to require third party verification of the funds, the source of the funds, etc for the transaction before any loan is approved and funded.if I can help you, please, let me know. Korene Clopine-Seaman NMLS 218520 serving Arizona mortgage needs. 623-340-0934 korene@klcsloanteam.com

Feb 19th 2016
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Justin Murray (JustinMurray)
#102 ranked lender in Illinois - 172 contributions

Yes, but I wouldn't recommend this at all!

Feb 19th 2016
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Phil Dumouchel (PhilDu)
#1 ranked lender in South Carolina - 2,228 contributions

Good advice above, your earnest money (binder) when you are under contract to purchase a home can be as much as the full downpayment you expect to make. However, those funds should be held by an independent 3rd party such as a Realtor or Title Co/attorney who will handle the transaction for you.

Feb 19th 2016
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Dan Paladin (dpaladin)
#1 ranked lender in California - 448 contributions

Though you may with the proper documentation sourcing and providing the paper trail. It is strongly urged against handling it that way...use an escrow company to protect yourself.

Feb 19th 2016
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Jesse Stroup (jessestroup)
#4 ranked lender in Idaho - 591 contributions

I think you can but it may not be a good idea.

Mar 9th 2016
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