I am selling a condo and I am having trouble with the sellers lender. Heres what has happened…
I put the condo on the market, and got a full price offer al most imedatly. As time went on eveything went as normal the apprasal came in at full value and everything looked great. Then the day befor closing the lender decreased the loan ammount. Their reasoning was that they pulled the mls and saw that one recently sold for 10k less than my asking price. It didn’t matter that the condo in the same complex sold for more than that one month ago. The whole deal is scraped, unless I lower the price 10k or the buyer comes up with 10k. This is going to cost me another month becuause i have to make another mortgage payment, I have already payed to get items fixed on the inpection report, and it doesn’t look like I can get the ernest money.
That blows. I do not know anything you can do except get another lender to do the deal. Appraisals are subject to review by the lender and they did not like the MLS sale that you mentioned. Had the appraiser used that unit as a comp your would not have appraised as high and you would have lost the deal anyway. To save the deal can you owner finance a second mortgage if you have that much equity. Just one thought to try to save the deal and not lose the months payment or the repair money.
That’s and idea, I was hoping to take the proceads from the sale and put it into a 1031, and I don’t know how receptive everyone envolved would be, but it could work. Sence I have never done that befor, what are the normal terms?
A 1031 needs to be handled by a company that specializes in 1031 exchanges. Basically they get the proceeds and hold it in escrow until you find a property to buy and then you buy that property. There are several rules as follows:
The property purchased needs to be the same kind, any real estate would do. Not stocks or bonds or gold etc.
You have 45 days from the closing of the first sale to identify a replacement property.
You have 180 days to close the sale from the first sale date.
The property you are buying has to be as expensive both in cash and mortgage or you may have to pay tax on the “boot received”
A pro can explain the above a lot better than I can. I found one on line thru Google that charges $400 for a simple one property exchange.
No problem. There are really no normal terms. Buyers want as long a term as possible with no balloon payment and sellers want as short a balloon payment as possible and as high a rate. Some where around 8 to 10 % is a fair rate for owner financing on a second mortgage with a 30 year amortization and a 5 to 7 year call. In deed of trust states you would prepare a note and deed of trust and have the deed os trust recorded to protect your position. Lawyers also want a venders lien recorded in the deed when selling the property. This is for extra protection I suppose. I have always seen it as redundant but it must have some merit or people would not spend the time and money to type so much extra stuff in the deed.