Shop Fittings

If a house seller buys new appliances, fixtures, and remodeling materials, is it a concession?

Suppose a house seller and buyer make a deal where the seller will pay for new appliances, fixtures, remodeling materials, etc.. First, the buyer gives the seller a big deposit, such as $10,000, as earnest money to buy the house. Then, the seller and buyer go shopping together, and spend the $10,000 on the new stuff. The buyer then does the work of installing everything and doing all the remodeling work, before even getting a mortgage. Then, with the new stuff installed, they get the house appraised, at a higher value because of the new stuff, and the buyer applies for a mortgage based on that higher value. The question is whether the buyer has to inform the mortgage company that the new stuff was purchased that way. In other words, is it a concession, or just a pre-sale home improvement? The mortgage company is informed that the buyer has paid the seller a $10,000 earnest-money deposit, of course, but is there any need to also tell them how the $10,000 was spent?

Public Comments

1. No need to say how or if the seller spent the money. Lender is only interested in the homes appraisal and your ability to repay the mortgage.