Dallas-Fort Worth Real Estate Investor Club

Hi, I received an offer on two of my homes that I had not come across before.  Essentially the offer is to pay full ask - and put a lien on the home $10,000 over asking price.  They will pay the note down 50% at closing and then the remaining 50% of ask 6 months later...which would leave $10,000 remaining on the note.  At this point they will ask for me to release the remaining lien to them, of $10,000.   I have never heard of this so I have sirens going off like crazy.  Anybody got any advice on this type of a transaction?   

I haven't heard of this method either, so I will merely speculate.  Bear in mind that I am not an attorney, CPA, or certified in anything in these regards.

It sounds like the buyer wants to "apparently purchase" your property at a high price.  They will then be able to demonstrate/justify to whomever that they believe the value of the property is at a particular level.

Apparently paying this higher price would also possibly/maybe give them a higher basis in the property, which would possibly/maybe affect taxation in regards to deprecation, profits upon sale, etc.

There could also possibly/maybe be a tax implication for you if this $10k "waiver/gift" would constitute paying them $10k.