by Phoenix attorney Christopher A. Combs, partner with Combs Law Group, P.C.

Question: The buyer agrees verbally to pay $300,000 for the home, but the buyer wants the Contract to show a purchase price of $250,000. The difference of $50,000 will be paid by the buyer to the seller outside of escrow. The reason that the buyer wants the lower purchase price is to reduce the assessed value of the home for property taxes. Can the seller and buyer agree to pay this $50,000 outside of escrow?

Answer: No. Any agreement of the seller and buyer to a reduced purchase price with cash paid outside of escrow would be fraudulent as to a third party, namely, the county assessor’s office. Furthermore, the recording at closing by the seller and buyer of an affidavit of property value for $50,000 less than the purchase price would be perjury by the seller and buyer.

 

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