Seller paid closing costs into escrow

[Dawning Sky]

Jason Ahrens wrote:
> Eric Anopolsky said the following on 28/04/2008 11:24 AM:
>> If you provide more info on exactly what that money will be used for, I
>> will try to give you more specific information.
>>   
> Specifically some of the money the seller is paying is going to escrow 
> for future property tax and insurance payments.
> 
> Now, for all the other items the "seller" paid for, I didn't even bother 
> recording as they would all fall under the "administration fees", but 
> this one has a different end result. The money that goes into the Escrow 
> account from the seller will, in the future, be used to pay my property 
> taxes and insurance. It's a one time injection into the account from the 
> seller at closing.
> 
> For example, from the HUD form in the Reserves Deposited with Lender 
> (numbers fudged for simplicity):
> 
> Item - Paid from Buyser - Paid from Seller
> Hazard Insurance - $100 - $0
> Property Taxes - $700 - $300
> 
> In total, this "jumpstarts" the escrow account with $1100. Every month 
> then, I put another $300 in it as part of my monthly payments. Twice a 
> year property taxes are paid out. Once a year, Hazard Insurance is paid out.
> 
> So, it seems I have three options:
> 
> 1) It's money given to me as part of closing (Income), but put into 
> escrow to pay some of those taxes and/or insurance fees.
> 2) It's money lent to me as part of closing by the seller on behalf of 
> the insurance and county (Liability)
> 3) It's money I "ignore" and have to be aware of the discrepancy when 
> the payments are dolled out adjust accordingly in my head until it's 
> "exhausted"
> 
> I figure #3 is the least correct way to do this :)
> 
> Jason
> 

I wouldn't consider it income.  It's an offset of the purchase 
price--often called seller's concession.

DS