Posted by Bud Branstetter on February 06, 2001 at 08:30:28:
The concept of a sandwhich L/O is for newer higher end houses where there are smaller equities. Sure it may work where there is a larger equity. But if you were a seller with 20-50% equity you would not want to walk away with little down. The typical T/B can come up with 3-5% so a 60-90% loan doesn’t solve the problem. If you promise to give them their price and get a new loan you have to perform.
Follow up is most important and sellers circumstances change. You will have success if you get a seller that can wait or carry some financing. And you have to think of the sellers needs. Mostly they want debt relief. The more equity they have the more cash they want. You have to discover what they truly will do and what you can do. You can offer them their price and get someone else to pay you more. But you still have to have the product to get them to sell to you. That product is your word and the hope that you will do what you say. The partially qualified buyers help you fullfil your obligation. You still have to convince the seller. It is a Field of Dreams. Buy it and the T/B will come, partially prequalified.