You get a big enough down payment to cover that and to leave enough profit.
Buyers' failed to "close" on Monday
- Thread starter GON
- Start date
Sorry to hear about this.
In 2008 we were selling our house. A buyer was lined up. Full price. He had a buyer for his house. That person was also selling and had a buyer. That buyer failed to get the loan. The dominoes fell and we were the end domino.
We were able to sell about eight weeks later but as you might surmise, the market was dropping. We had to drop the price as everyone else was doing so.
In 2008 we were selling our house. A buyer was lined up. Full price. He had a buyer for his house. That person was also selling and had a buyer. That buyer failed to get the loan. The dominoes fell and we were the end domino.
We were able to sell about eight weeks later but as you might surmise, the market was dropping. We had to drop the price as everyone else was doing so.
Well as an attorney state, the attorney actually does the closing, but they could just be representing the bank instead of the buyer or seller. Sometime seller will use the bank closing attorney or the buyer's attorney and they won't have one, but they don't save as much as they think because the bank/closing attorney will charge them a fee to draft up paperwork like the deed. Plus then the buyer's attorney will put in lots of stuff in the P&S that favors the buyer but the seller won't know what is normal and customary and just accept it all. Same deal with a fsbo, easier to hammer them or they don't know what they're doing and they blow up their own deal.
FHA/VA loans still allow 3-3.5% for a down payment so on a 200k house, you're only getting a few thousand. Plus by the time you evict them the market would probably be even lower. Plus OP mentioned he was only holding 5k.
Foreclosure typically takes at least 6 months minimum. You are also having a lot more at stake say if they damaged the home as a trashy person in general (not as a retaliation).
It is always better to sell and be done, let the bank deal with the financing. Transaction cost is usually about 10% total (5% commission, then other nonsense like title insurance and bank "fees" all end up about a few grand, etc, tax, etc). A conforming loan is also subsidized by the Fannie / Freddie and if they don't lend to your buyer there is something wrong, you are taking on a bigger risk and you better be prepared to hold the bag just for a few bucks more.
I'd never be taking that kind of risk. If a bank can lose that much money and refuse to deal I'd probably not as well. Afterall I don't have billion dollar to diversify and weather the probability.
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GON
$150 Site Donor 2025
It appears that the Buyers / their lender and attorney have dropped the ball. Accordingly, the sale is proceeding forward with no mortgage contingency, so that Buyers have no contractual “out” of the contract.
GON
$150 Site Donor 2025
My speculation was the loan officer is new, and the attorney the Buyers' retained is not a real estate attorney, and likely doing the transaction as a courtesy. Perfect storm. This is a very hard to sell home, so I am trying to complete this transaction.
GON
$150 Site Donor 2025
The Buyers attorney's practice does not focus on Real Estate per my wife.
And in a locked thread, my prior contract on the home fell through quite possibly because my attorney was not so responsive or real estate saavy. He would take any work that came his way.
My current attorney only does real estate. I learned my lesson from my last "general purpose" attorney.
GON
$150 Site Donor 2025
We agreed to give the Buyers' a two-week extension.
GON
$150 Site Donor 2025
Yes, and this loan is an FHA loan. So "suing" the Buyers likely would not produce any tangible benefits.
Buyers are paying 4k above the listing price, but I am kicking in 8k at closing, so really the Buyers' are paying 4k under listing price.
Most of the time I had issues with an attorney, the attorneys were not real estate attorneys. Sometimes they were general practice ones and if you needed something, sometimes they were in court on a case for several days so nothing got done especially if they were a small firm. Always better to get a real estate attorney firm that has a few lawyers, they will have someone to cover if someone goes on vacation or if they're sick and most real estate attorneys I know only do real estate and not litigation so they're always available and not gone for days at a time. Also with a larger firm, it's usually the closing attorney that is holding the funds in escrow and it's their job to disburse it after the closing. I've heard of cases where a small single attorney firm stole the money and disappeared so that after the closing, the seller never got the money.
Very possible. That being said, if a marginally higher interest rate was enough to put the home outside of their qualifications then their budget was likely stretched far too thin in the first place so this may have been a blessing in disguise.
Standard DTI ratios are 36% for total debt and 28% for housing. You can easily go a few percentage points more but lenders don't allow it. Some people end up spending more than 50% of their income on housing, but that's considered unaffordable. Federal government considers not more than 30% spent on housing as being affordable.
In this environment, it would be almost criminal not to do a rate lock and that's typically 30-45 days. What typically happens is that they submit an offer based on an old pre-approval with a lower interest rate. After the offer gets submitted, the lender runs the numbers again and then the higher rate means they no longer qualify. If they qualified at the beginning with the current rates, they would have locked the rate. And if the loan takes longer, then you just pay for a rate lock extension but eventually those extensions also expire, typically after 30-60 days. You may need those extensions if you run into title issues that may take time to clear up. Also a lot of times when the fed signals they're going to raise rates, the rates have already shot up so that by the time they actually raise it, not much happens to the actual rate.
They don't have to read every page every time - many of the forms are standard forms with standard clauses that don't ever change or they change infrequently (most of the HUD forms, state-mandated and specific forms on Homestead laws, etc) but she had read them at some point in the past. Every form she presents she knows exactly what it is, summarizes what it says, and answers any questions immediately. For the forms that have information that can change or need to be filled in with specifics of the deal and I can assure you she read each and every one of those because she has caught a few mistakes on those forms over a few different transactions. One mistake had nothing to do with me and wouldn't affect me but the way they listed the numbers she didn't think the mortgage would be able to be sold on the secondary market after closing. She was kind enough to bring this to the attention of the bank and they told me she is a very sharp attorney. I asked the mortgage lender what would've happened if we signed the papers as is and he said they have to way of collecting monthly payments because they sell 100% of the mortgages they close. He laughed and said he didn't know but it would probably be him sending a handwritten statement every month. In 20 years she has saved me pain quite a few times.
Keep the money, but expect a fight, and you may not be able to list the property until that battle is settled. Then have the person vetting potential buyers do a better job. Good luck selling it.
Yeah, for sure. Had a tenant I had to evict - jerk went into the attic and poured motor oil (ironic since this is BITOG) all over the insulation. Didn't seep into the ceiling sheetrock until a few days later since he had clearly done this before and knew not to over pour.
Damaged the house and cost thousands to repair. Jerk had no money and wasn't even worth getting a judgement. What was worse was he wasn't even on the lease. I had leased to his ex-wife who had been a great tenant for about a year.
Then they "reconciled" and he moved in. Problems ensued immediately and I exercised the "no additional tenant/s allowed" clause and it went even further downhill from there.
That ruined housing rentals for me. I sold my two units and put money in the market and haven't looked back.
Don't miss the headaches at all.
We had a house in my hometown that the deadbeat renter stopped paying rent and we had him evicted six months later. His final poke in the eye was to pour cement in all the toilets and pour used motor oil all over the carpets and hardwood floors. We got the final laugh because the gas station next door bought the house for the land a couple months later and we didn't have to fix anything.
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It's interesting how things are starting to fall apart in large numbers compared to just 3-4 months ago, where in March and April, people were fighting over homes, paying $10, 20, 50, 100K over list price, putting 50-60% down to avoid appraisal, inspections, etc. and closing within weeks.
Just think how fast the housing market has declined, yet most RE agents/brokers swear up and down nothing is wrong.
I wish you the best of luck unloading this house, GON. Hopefully this will be behind you before the leaves change color.
Just think how fast the housing market has declined, yet most RE agents/brokers swear up and down nothing is wrong.
I wish you the best of luck unloading this house, GON. Hopefully this will be behind you before the leaves change color.
A person who does that should live in a "house" with metal bars as their front door. But in today's world people like Wayne, who provide housing opportunities to renters, are somehow considered evil opportunists.
Scott
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