Can a Winston-Salem listing agent advance the cost of a home seller’s repairs?

Can a Winston-Salem listing agent cover the cost of repairs for a home seller who may not have the money until closing, if the payment is disclosed on the closing statement and then paid back at closing from the seller’s proceeds?

The NC Realtor association does not recommend it.

The sale transaction might not actually close, and the element of the payment might impair the Realtors independence in advising their client.

Having said that, the fact is that in recent years several large brokerage firms have offered to advance repair costs as a service for their seller clients. The practice is legal.

A broker who is willing to advance repair costs for a client must recognize that certain requirements must be followed.

First, the seller’s repayment obligation may not be secured by a deed of trust.

That is regulated by NC SAFE act which regulates who can legally make a residual mortgage loan.

The second requirement is that the repayment of any advance must be disclosed to the buyer’s lender on the closing statement.

To avoid any last-minute problems with the lender, we also suggest that the advance be disclosed to the home buyer’s agent as soon as possible, so they can let the lender know and make sure they're cool with it.