Posted by Vic on June 08, 2000 at 02:02:48:
Abby,
Hi!
To answer your question about qualifying. In all likliehood the bank is going to ask for some kind of proof that you would qualify for that kind of a loan. Remember the bank is selling the house to “you”, not to anyone else. They could care less what you want to do with it. You are asking them to take their house off the mkt. because you want to buy it. They’re alot more likely to do this if they know you can qualify for a loan.
Now with that said, providing proof shouldn’t be all that difficult. Just get a mtg. broker to write a letter saying that you’re qual’d for that much of a loan. Then later, if things fall apart & you don’t want to buy it, just get another letter stating that you didn’t quite fit their parameters for a loan. (I wouldn’t do this too often though, cuz if you do, word will get around.) This should suffice for the bank. They may want to follow up though with phone calls to your mtg. broker to make sure things are progressing, so be prepared for that.
You also said something else that disturbs me. You said you sent the buyers to go look at this house. What happens if they go look at the house & then make a deal with the seller directly? Have you protected yourself in any way (such as a non-circumvent agmt.)? or are you just relying on buyer’s word? I certainly hope it’s not the latter, because you’ll be in for the shock of your life when the buyer goes around you. It happens many, many times. You have to protect yourself at all times in this biz. Never forget that!
It sounds like your buyer can qualify for the house based on what you’re telling me. I would however, want to make sure that they actually have that much cash in the bank before you sign any contracts. Just get them to sign a letter that says that the bank gives you permission to verify that those funds are actually in their acct. Then take this form to bank & verify the funds.
Abby, I would also contact their mtg. broker/bank & make sure they qualify there as well. Never assume that a buyer knows what they are talking about when it comes to financing. Most have no clue what’s involved with getting financing for a house.
As for the price. I really don’t know if that’s a good deal or not. How much is that extra land really worth? That would be the thing to find out. I’m not real sure how you would do that though. Perhaps you could get an appraisal, but that’s only going to be one person’s opinion. I think the bottom line though will be how much can you buy it for & how much will your buyers pay for it. Once you know this then you can make a good decision if the risk is worth it. Make sure you do all your homework on this one though. You don’t want to end up losing a deposit if it can be avoided. If you have a real estate friend, you may want to ask them to help you on this, as it sounds like it could get a bit complicated.
I hope this post doesn’t discourage you in any way, because it’s not meant to do that. Just want to make sure you know what you’re getting in to & help you avoid some mistakes.
Good Luck & let me know the outcome.
Vic
Abby G.