Help My Real Estate/Financing Situation - Posted by FirstTimeInvestor

Posted by JPiper on January 19, 2001 at 24:52:04:

In my mind step one would be to stop, take a couple of deep breaths, and calm yourself. What is required of you here is to assess your situation…and that should be done when your mind is calm.

The fact that the broker submitted your application as an owner occupant may have slowed the loan process because perhaps he had to change lenders. Every lender doesn’t have the same programs. Perhaps he’s taken your deal to a different lender to get an investors loan with a 10% down payment.

Either way, while that may be creating stress for you, and while he may be creating stress for you by claiming that you have made this difficult, the fact is that this shouldn’t necessarily have slowed the process that much. If he ran a credit report he should be able to still use it. He may be able to use the appraisal. He already has the 1003. I would think this loan should be able to happen by the 31st.

If there is something in this process that delays the loan, then I suspect your contract is contingent on your ability to obtain financing. If this is the case, the deal is off…there is no penalty. That’s what contingencies are for. Any earnest money you have deposited would be returned to you. The seller has no lawsuit with merit.

If there has been a delay caused by the submission of a false application, then the problem in my mind would be for the real estate broker/mortgage broker. What could be at stake for him would be his licenses to do business.

But things don’t have to get there. I only mention all of this to point out that if you have a financing contingency in your contract, if you don’t get the financing by the 31st, then the deal is off (unless you purposely delay and become uncooperative at this point).

But let’s assume that you have a deal that you want. How difficult would it be to request an extension from the seller for a few days, a week, for the purpose of finalizing your loan? This too happens all the time. Unless the seller has a higher offer lurking in the wings who is prepared to close, the chances are that even if you need to extend somewhat, you’re still his quickest deal. My guess is that your broker has seen and done this numbers of times.

So the bottomline is that your worries up to here are rather baseless…like most worries are. Now whether this is a deal? I don’t know…you haven’t given us the information with which to decide that. Whether you have enough money to close? Again, we don’t know.

I would advise you to call Ed at 909-944-0199. He’s right your backyard. Run your deal by him to get his opinion. Start focusing on what you need to do, rather than worrying about things that “might” happen. This is the same deal that you made your original offer on…nothing is different. If it was good then, it’s still good. You’re doing an NOO loan…just as you wanted. You have the same money in the bank now that you had when you made the offer. Relax…give Ed a call, discuss your deal.


Help My Real Estate/Financing Situation - Posted by FirstTimeInvestor

Posted by FirstTimeInvestor on January 18, 2001 at 17:18:27:

I am new at home investments.
I live in San Diego where property values a sky high.
I am looking at a 5 bedroom 2 bath house in a
very good area.
I know that I must look at comps to determine
the resale value.

I am in escrow now with an offer of $263000.
I have to put 10% down which will squeeze me to the limit.
I have a loan, after fighting for it,
for 7.75% with .75 points.

In order to get this deal I have to pay some
of the sellers closing costs,
except for his real estate agent.

The person representing me will get 2.5%
as a buyer’s real estate agent.
He is also the mortgage broker.
He put up a fight when I wanted to go non-owner occupied. He suggested that I “say” that I have the
intention to occupy the property even if
I’m not so I could get a better rate and
have less money down.
I told him my conciense would NOT let me
do this and I will state that it is
non-owner occupied. He gave me a hard time
but finally flipped the loan to non-owner occupied.
He was going to have me pay 2.5points and I told
him I could find it cheaper elsewhere.
After giving me a hard time again,
he told me he could match the other company so
we are continuing with the loan, however he told me
that I am creating the most difficult transaction and
that he has had to work harder for this transaction
than any other one in his career. Is it that hard?
He advised me incorrectly. Aren’t there stiff fines
from the government if I sign papers that it will be
nonowner occupied and sign false rental agreements for
the current residence?? I told him I would be honest
even if it will make life more difficult. I want to
do this real estate investment business right from the
start. Why should he care if I want to change the loan
100 times? He should be working for me not insisting
that I do as he tell me and then be upset with me if
I don’t. Right? or Wrong?

I have done the appraisal and home inspection so far.

I feel that I am fighting with the wolves, I am being
squeezed tight for the down payment because I will provide
my entire savings and fill up the equity line on my current
mortgage and I also feel that the profit margin will not be
that great after I pay the costs on the loan, costs for
repair, capital gains tax and the fee for the real estate
agent to sell the house.

I am assuming that I could sell the house for $330000
IF the market stays good in San Diego.
It went up 20% last year.

I am just going to keep this house for a few months
until I have it fixed and sold.

I need advice. The appraiser will not give me a After
Repairs estimate without charging me $300 for it.
How can I do my financial plan?
How can I be creative about financing?
I thought of getting a second on the house when
I’m done with escrow so I could get my savings
account back.

I want to do this the RIGHT way and the ethical, honest
and profitable way.

I need an honest and ethical
real estate investing mentor
who can take me under his/her wing and help me through
this deal so I don’t lose everything financially.

Please HELP!!

Re: Help My Real Estate/Financing Situation - Posted by JPiper

Posted by JPiper on January 18, 2001 at 20:29:58:

First, what your real estate broker/mortgage broker was proposing is loan fraud. Fines??? I hear one penalty for fraud is the grey bar hotel.

I don’t hire appraisers to give me estimates of after repair value. I use comps. You can get comps for free from your title company. Compile your own information.

Why don’t you call Ed? He’s in your own back yard.


Re: Help My Real Estate/Financing Situation - Posted by FirstTimeInvestor

Posted by FirstTimeInvestor on January 18, 2001 at 20:54:27:

That’s absolutely right! That is why I DID NOT want to go through with it. I just can’t figure out why he had such a hard time honoring my clarity of conciense and changing gears when I asked him to. Perhaps he made more money on owner occupied.

Thank God that he gave me a conciense!!

Now I have only until the 31st of Jan to close.
What can I do?
Will the seller charge me penalties
if we pass this agreed upon date?
How can I proceed from here so I can make a profit
on this property or at least protect my assets?