seller carryback. Please tell me if I can do this - Posted by Monique

Posted by Nate(DC) on February 07, 2002 at 23:29:52:

If there are 2 agents involved, that’s 2 different people who want your deal to close so they can eat.

Surely one or the other of them will have some idea how to help. Or will know a lender that can. Why not ask them!

Good luck,

seller carryback. Please tell me if I can do this - Posted by Monique

Posted by Monique on February 07, 2002 at 22:20:37:

Hi. I need some help. I have a contract on a home I would like for myself. The asking price is 130,000. We agreed to this price. We were going to do a no money down gift program and therefore we had to inflate the price to about 137500. We thought the house would appraise to at least 140000. The house appraised at 133000 and the seller is required by our lender (FHA) to do some repair work. Now that the appraised price is lower, we cannot do the gift money to include down payment and closing cost and keep the cost on paper at 133000. I was considering offering the seller a note consisting of the down payment, but I dont know how that would be structured in a contract. There are 2 realtors involved so I would obviously have to use their contracts (as opposed to Someone elses like Ron Legrand). Can someone help me on this. I really like the house for my family. Time is of the essence.

Re: seller carryback. - Posted by Shane

Posted by Shane on February 08, 2002 at 20:31:14:

FHA is not a lender. Your lender is whatever financial institution you are using. FHA is an insurance program available to lenders to qualify borderline borrowers (borrowers who for whatever reason cannot use conforming products). FHA will not insure a mortgage with a seller carryback. More importantly if the property only appraised at 133k are you sure you are getting a good deal here? I would play hard ball and tell the sellers they can reduce the inflated price to $133,000 still make the 5.75% contribution to your money down gift program and walk away with $125,812.50 or you’ll be getting a denial letter from your lender which will entitle you to your earnest money back and they can start over finding another buyer. At this point they know they will have to disclose whatever problem the FHA appraiser pointed out and it may be in there best interest to get the deal over with. Of course this is contingent on there willingness to fix whatever needs to be fixed as well. There only alternative is to wait for a buyer that is not using an FHA insured program and is willing to negotiate on the repairs. Good luck Shane