I just received an offer on my current fix & flip and I thought I'd run it by the BP crowd. Here's the scoop:
1. House has been on the market for three days and has received one lowball offer in addition to the one discussed here
2. Offer is for full asking price with 3% seller assist
3. Buyer will make an initial deposit of $5,000 to be held in escrow
4. Mortgage Contingency:
Loan Amount: full asking price (100% financing)
Minimum Term: 30 years
Type of Mortgage: VA
LTV Rate not to Exceed: 45%
Interest not to Exceed 4.5%
They are pre-approved for 100% VA for $40k over sale price (no mention of interest rate)
5. Mortgage Commitment Date: 7/14/2015
6. Closing Date: 7/28/2015
7. Seller purchases home warranty
8. Home, termite, & radon inspection contingencies
9. Current home sale contigency -- Their current home is under contract and enters inspection period on Monday
I'm worried mainly about two things:
First up is the appraisal. As this house is now the best in the neighborhood and their offer states that they get their $5k returned to them if the property doesn't appraise per the VA/FHA language. I fear I won't be compensated for lost time if it doesn't appraise.
The second thing I'm wary of is the contingency on the sale of their current home. I've never dealt with this situation before (luckily!), and wonder how common it is for these deals to fall through. A million things can go wrong with one real estate transaction, let alone two back-to-back.
Anything else I need to freak out over?
I'd wait a week before making my decision. Is this a realtor listed sale? I don't like sale of l my home contingency and was confused about the 100% financing at 45% LTV?
Your fixed-up place shouldn't run into too many issues with VA / FHA. I sold a '78 home to an FHA buyer in '05 and they took me through the ringer. Paint this facia, floorjack the basement slab, install baseboard here. It was 2 states a way. Never again with a home that isn't new.
Originally posted by @Steve Vaughan:
I don't like sale of l my home contingency and was confused about the 100% financing at 45% LTV?
Your fixed-up place shouldn't run into too many issues with VA / FHA.... Never again with a home that isn't new.
Thanks, Steve. I, too, am confused by the 45% LTV with 100% financing. I'll have to get back to them about that.
Sounds like VA/FHA are sticklers. That worries me a tad, as the house is quite large and has a pool. It was built in 2004, though.
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