What does the loan proceeds cover in real estate?

Question

What does the loan proceeds cover in real estate?

Answer 1

We usually use the word "proceeds" to mean the check the seller receives at the closing of the sale.  The proceeds are the purchase price minus the loan payoff and any fees.

When a buyer gets a loan to buy a house, the loan funds and the money arrives at the escrow company.  The buyer is paying in 2 portions:  the down payment and the loan money.  When the loan money arrives, it doesn't "cover" anything in real estate.  It just goes to the purchase price.  The seller doesn't care if the buyer puts $3,000 down and borrows $97,000.....  or .... puts down $97,000 and borrows $3,000.  As long as it totals up to $100,000.  /