I have been under contract with a buyer since 9-24. We were suppose to close on 10-24, and was canceled on the day of closing, because of an unexpected tax lien that showed up, so I extended closing to 10-31, but we didn't close. Extended again to Nov 8th at $50 per day. Didn't close...Extended again to Nov 14th at $50 per day...You guessed it...Still didn't close. Was asked to extend again to Nov 21st, as of yet I have not signed amendment. I ended up meeting the buyer over the weekend, I was there to check on property and she stopped by because she said she was excited. She also told me that she had a tax lien (which I already knew) for $3k that she paid off. (also agent asked me to raise purchase price $5k to help with buyers closing, and I did it)
The lender told me Friday that they did not have a ctc yet and that it was just re-conditioned. I do have an agent, but it's in the middle of the night an it's on my mind now, so I decided to come here and get others thoughts, before making a decision or talking with my agent. I talked to my lender and I was thinking of sending over a termination with stipulations (don't know if that is possible) that if buyer applies with my lender I will extend the contract. Or should I just send an amendment stating that I will extend only if buyer applies with my lender. The attorney said today they still have not received the cd from lender, so at this point I think they may need to extend past the 21st. So I was thinking to just terminate, the buyer will lose her earnest money, but of course I rather have the sale. However if buyer agrees to apply with my lender I will extend at no cost per day, but buyers agent and lender are good friends so I don't know if agent will relay the message even though she is suppose to.
FYI: Having the FHA Case Number reassigned, and the appraisal transferred, could easily tack two weeks onto whatever benefit you'd get from moving the buyer over to your rockstar loan originator. Your rockstar doesn't control how fast or slow the old lender (who is no longer getting paid for their work to-date on this transaction...) helps facilitate.
@Alex S. A couple of things... First, even in the event of buyer default, you will most likely have to split the deposit. Generally, both parties have to sign off on the release of deposits, and a buyer who defaults has zero motivation to sign that release. They'll just leave it sitting in escrow forever unless you give them a reason to sign off.
Next, you raised the purchase price to help the buyer finance her closing costs. Will that trigger a re-appraisal? Will that $5,000 push it over the limit? I've found that FHA deals are often very tight in terms of appraisal and credit scores.
Speaking of funds, are you really going to be able to collect that $50.00 per diem? It's $1,400 as of today - does she have it? If that shows up on the CD, it could kill the entire deal if she's borderline qualified.
Finally, I'd recommend that you or your agent talk with her lender and find out exactly what the delays are. If the major hurdles have been cleared, selling to someone this far through the process is most likely the fastest way to a sale. Re-applying through your lender will probably take at least 30-45 days.
Thank you both for your response. My lender said if the buyer is a strong buyer she could get it close in about 2 weeks. Charlie the house appraised for 9K more than selling price, so the $5K will not push it over the limit. What is crazy is that when I first started other investors told me to stay away from FHA buyers and I did. In all my listings I would put no FHA buyers and plus I couldn't away because I owned all of my properties less than 90 days. This is my first time selling to an FHA buyer an it is almost 2 months.
Chris I want to move her because I am starting to believe the buyer cannot afford this home and the originator is not being transparent about it. My lender will let me know the truth. This has been extended 3 times and going on 4th with no other explanation other than we are working on it (the tax lien). As far as the $1,400 for the $50 a day, that is not a big deal to me, I thought that would be an incentive for the originator to move a little quicker. I slept on it and believe I am just going to move on. I am not in a financial bind if I don't sell the property and not sure if this buyer can close. I hate to give another week or two just for them to tell me they need another week or two, when I could have placed it back on market and probably grabbed a qualified buyer before the holidays