Lender is not wanting to lend the full amount to the buyer

7 Replies

I'm a wholesaler and i have a contract for $110,000 with the seller. I assign it for $30,000 now the buyer is coming back to me and saying the lender will only be able to lend at $125,000 cutting my $30,000 deal.  SHould i agree and cut my losses or re structure the deal that he will owe me on the backend of the sale?

@Jodie Fae You have several options. If you’re confident in the current price, you could hold at the price you agreed to and tell the buyer to come out of pocket for the rest (if they’re willing/able).

Or, if they’re not willing, cancel the agreement and sell to another buyer at the original/higher price (assuming you have a buyer willing to pay it).

Or finally, agree to come down on your price to make the sale happen with the current buyer. After all, even at the lower price ($125k), a $15k wholesale fee on that size deal is pretty decent. 

Thank you for this  Kyle,
I told him that i would agree to coming down where he needs to be in order to get the lender to approve, however according to my attorney he said he could write up a note to secure this on a mortgage the remaining amount he would owe me.  Does that make since?

thank you

Originally posted by @Jodie Fae :
Thank you for this  Kyle,
I told him that i would agree to coming down where he needs to be in order to get the lender to approve, however according to my attorney he said he could write up a note to secure this on a mortgage the remaining amount he would owe me.  Does that make since?

thank you

Sounds like your attorney is referring to doing a loan in second position for the borrower, essentially a second mortgage. 

Be careful, an undisclosed or disallowed 2nd mtg can be a real no-no. Everything will have to be on the HUD-1, and that might fudge up the deal anyway. Keep it clean, take a profit and move on to the next deal.

@Jodie Fae As long as your buyer is being honest about the lender approval and not using this as a way to get a discount on the deal the I would work with him and see if there is a middle ground. Perhaps he can bring some cash to closing to pay an additional portion of your wholesale fee. Maybe an extra 5k and you call it a deal.