Ok so my 2nd flip has had issues in the sales process. I wrapped up the construction late and ended up able to got with FHA buyers....
So the FHA guy appraised it 7k lower than the agreed on price. Now 2 days before closing they either want to 2nd appraisal or documentation on what I purchased it for and list of all repairs completed (budget breakdown). Am I under any obligation to share my purchase price or construction costs?
I am in TX property is in TX and they put a 3rd party finance contingency, saying they can walk if doesn't appraise or close by expected close date.
So the way I see it is don't disclose and then let them decide to buy it per contract or bail. I then re list and hope for better price or B turn it into rental property.
@Thurman Schweitzer The issue is that on an FHA loan the appraisal stays with the property for 6 months so you wont be able to sell FHA for that period. You can share on a word doc all the repairs and upgrades and approximate prices. You may even inflate them wink wink. They typically dont want actual hard numbers. Maybe you can let them make the first move. maybe they buy it and pay the additional 7k out of pocket? Who know but wait and see what transpires.
Otherwise they can most likely walk from the deal if you dont come to some common ground
Thanks, I am over the 7k , I still did ok just not good! They asked for HUD form from when I bought it from the wholesaler, they said word is fine on construction costs. My question is if the 2nd appraisal comes in low then I refuse to drop again and find new buyer, maybe cash one next time...
FHA guidelines require a 2nd appraisal when the price increase is 100% from the original purchase price. So if you do not provide it, you simply can not sell to any FHA buyer.
Thanks that makes sense, sounds like I should go ahead and provide the documentation and more on
Obviously, you have the choice not to provide the documentation with the understanding that the deal does not get done if you do not. I have been asked many times and while it seems irrelevant to me(either it is worth it or not my the comps), I have no issues with providing the information nor with showing a profit
@Alex Deacon FHA Appraisals stay with the property for 120 days
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