Posted by dutch on April 09, 2006 at 21:05:03:
Careful about what a mortgage broker tells you. I’ve seen way too many deals go up to the last minute and then the broker finally admits that he just can’t get the deal done. This is an underwriting question, which your broker may or may not be able to direct.
FWIW
Dutch
Selling Home FSBO, Would You Do This Deal? - Posted by Jeremy
Posted by Jeremy on April 08, 2006 at 20:47:56:
I am selling my current home FSBO. It’s been on the market three weeks, and we finally received our first offer. The list price is $259,900. The couple that wants to purchase the home was prepared to pay full asking price since I am priced $10,000 or more below any other home in the neighborhood. When their financing came back, they were only pre-approved for $245,000. They’ve gone to a couple other brokers/banks, and 245k is the best they can get. Should I consider seller financing a second mortgage to cover what they are missing with the first, (about 20k with closing costs included), or should I just dump this deal and look elsewhere? I am in the metro Orlando area, and the market is really strange here right now. The home prices shot up so rapidly that people are having a really difficult time getting financing, and I wonder that this would just come up again with future offers. Anybody have comments on this scenario?
Re: Selling Home FSBO, Would You Do This Deal? - Posted by Natalie-VA
Posted by Natalie-VA on April 09, 2006 at 10:36:35:
Jeremy,
Will their lender allow you to take back a second?
Generally speaking, if they can only afford 245k, the lender is not going to approve your second.
Financing is not difficult to get. You just chose to accept an offer from someone who wasn’t qualified. We live, we learn.
–Natalie
Re: Selling Home FSBO, Would You Do This Deal? - Posted by wpage
Posted by wpage on April 08, 2006 at 21:26:08:
Jeremy I would definitely sell this property and take back a second for the difference. What have you got to lose. The worst that can happen is that you never get paid the second. In the mean time you have your money to reinvest somewhere else. The next buyer may not be as good and may not get financing either.
Re: Selling Home FSBO, Would You Do This Deal? - Posted by Jeremy
Posted by Jeremy on April 09, 2006 at 13:20:23:
Thanks for your comments, I appreciate your help. I spoke to their mortgage broker, and he didn’t think the second would pose a problem, since the loan and payment amounts on it would be low. Any suggestions on how the second should be structured?
Re: Selling Home FSBO, Would You Do This Deal? - Posted by wpage
Posted by wpage on April 11, 2006 at 06:39:22:
Jeremey I would set the loan up so that you will receive payments every month. The more they can afford the better for you because every payment with capital reduces your risk. You could set the interest rate higher than the first with a balloon payment of 3 to 5 years. Also put a clause that if they sell or refinance that you must be paid in full.