Updated over 15 years ago on . Most recent reply
Short Sale/Simultaneous Closing help with FHA end buyer
This is my first short sale, and I'm representing the investor in an A -B, B - C transaction, the investor being B.
The bank has done the BPO and verbally approved a price. My investor is almost on board with that. I've listed the house for him and we've gotten several acceptable offers from end buyers.
Unfortunately, they're all FHA buyers, and FHA lenders will not allow a B - C transaction without the seller (B) being on title the day of closing. Apparently, FHA will not even order an appraisal or take a mortgage app from the end buyer unless that is the case.
Has anyone successfully completed a short sale with an FHA buyer? Thank you!
Most Popular Reply
No, not a flip. Your investor should find a transactional lender or a hard-money guy willing to hold for 30 days.
The real problem is that FHA buyers are very sensitive to costs and they are usually skating on thin ice when it comes to credit score.
I had a Fix n Flip I was trying to sell not too long ago. I had three FHA buyers fail to close where two were using their credit cards to buy crap for their new home and their credit scores dropped too low and another who could not come up with enough money to close.
Lesson here is FHA buyer's are here today and gone tomorrow. They are the most fickle and least educated of buyers. The risk is too great to close and carry for an FHA buyer.
Chances are, if your attracting only FHA buyer's then your price is too high.