Gift Of Equity Contract Example With Loan In Washington
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Multi-State
Control #:
US-00036DR
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Word;
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Description
The Gift of equity contract example with loan in Washington serves as a framework for two parties who wish to invest in and share ownership of a residential property. This form outlines critical aspects such as the purchase price, down payment responsibilities, and loan terms from a financial institution. It includes provisions for maintenance responsibilities and the distribution of proceeds upon the sale of the property. Additionally, it establishes the partnership through an equity-sharing venture, detailing initial capital contributions, percentage shares, and the handling of any additional loans between parties. The agreement mandates equitable sharing of expenses and taxes while ensuring both parties' interests are protected if one party passes away. This contract is particularly valuable for attorneys, partners, and legal professionals as it offers a clear structure for equity arrangements, reduces legal complexities, and supports proper documentation in property transactions.
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FAQ
For example, if you own a home worth $300,000 and sell it to a family member for $200,000, they've received a gift of equity of $100,000. A gift of equity can occur if a home is given away for no compensation or if a discount is offered on its value.
Conventional lenders won't accept gifted equity as a downpayment. Heck, almost no commercial lenders will allow it either. The concept of collateral is really lost at that point.