McDowell Mountain Ranch Trail Talk

Can I discount the sale price to create a down payment?

Home / Buyer Help FAQ / Can I discount the sale price to create a down payment?

No.  Lenders provide financing based on the sale price or the appraised value, whatever is less.  In the case of a “discounted” price, say selling a home worth $150,000 for $140,000, the sale price is $140,000.  Lenders do not recognize a discount.

A better approach is for a home buyer to pay full market value but to make the transaction dependent on a “seller contribution” at closing.  The effect is the same, but the accounting makes more sense to lenders.