Posted by Brent_IL on August 27, 2003 at 15:44:08:
“Kite” or Kiting" is slang for something that is overvaulued because there is nothing underneath it holding it up. Kiting a check means depositing a check that will not clear because of lack of funds into one bank and working the float by depositing a check from the first account into a second bank and drawing successive checks between accounts so that you can use the cash from the first transaction without paying for it. Kiting an appraisal means arranging for an appraisal that indicates a value higher than the sold comps will support.
I don’t understand why you are negotiating if you have a done deal.
I’m looking at a 2-family and the offer on the table is $11k more then the asking price of $229k. This was decided due to the seller paying the closing cost. I obtained a 75% LTV loan and the seller is holding a note. The house was purchsed in 1995 so I know that the 75% LTV will cover the sellers mortgage balance and then some. However, the seller is looking for $15k cash at close which is an amount I don’t have. She will hold a note for 45k no interest.
What I wanted to do was offer $11k more in return for closing cost being paid and little to no money down. Does this sound far fetched. I was going to go back to the seller’s agent and offer $5k at close with an interest baring note for $55k seller financing.
Uh, is there even a deal here? - Posted by DaveD(WI)
Posted by DaveD(WI) on August 28, 2003 at 08:58:51:
Ivan, before we get all fancy about how to buy the house, what is it worth? It seems to me you are overpaying market value just so you can get a partial seller carry? Doesn’t make sense. If your goal is to buy with nothing down you’ll find you can do that all day. The trick is to buy nothing down and still walk out of closing with a huge chunk of equity and/or cash.
It’s all about getting paid. How do you do that if you overpay asking price? Maybe you should find a real deal. Just my opinion, of course.
-Dave
I offered more but seller still wants cash? Help! - Posted by Scrooge McDuck
Posted by Scrooge McDuck on August 27, 2003 at 16:43:53:
I take from your post that you are paying $240,000, made up of the asking price of $229,000 plus $11,000 for closing costs? And that you are getting a mortgage for 75% of $240,000, or $180,000?
How much do they owe? Your mortgage advance is $180,000 so if they owe $165,000 or less, they will have $15,000 change left over after they pay off the old mortgage.
Surely there will be some cash left over? Maybe you don’t have to come up with the full $15,000 is what I am saying. You might not have to come up with any money and they will still get $15,000 or more from the mortgage advance?
Re: seller still wants cash? Help! - Posted by Brent_IL
Posted by Brent_IL on August 27, 2003 at 13:58:18:
When you say that you obtained a 75% LTV loan, you mean you have applied for a loan or for pre-approval, right? Otherwise, your offer has been accepted.
You can offer anything that you like. Financing it will require an appraisal that will support the loan. Most of us look at property from an investment standpoint, so the monthly income and expenses are important. The seller’s wish list is of secondary concern.
Can’t you increase the LTV on the first so you don?t have to kite the appraisal?
The LTV that I received is as good as I was able to get considering my current lack of credit. Your right, the offer was accepted and I received an approval letter.