Buyer Does Not Want To Move For 5 Months.
I have a potential buyer that is interested in one of our homes but lives out of state and will not be relocating until May. I thought of proposing to have her close 1st week of February (1st payment wont be due until April 1, 2005) then offering to pay her 1st two mortgage payments for her so she can move in in May and not owe a payment until June. Doing this still keeps me above where I want to be margin wise.
Anything wrong with doing this? Is there a better way to structure it?
Thanks in advance.
Suntzu18
Is this a rehab/flip?
If yes, your holding costs are liking eating you alive. Propose to the seller to close ASAP and then if need be give a dedicated grant to cover a few months of mortgage payments.
The interest on your buyer's loan will likely be less than what you are paying now and you'll be able to get paid now vs later.
Because you are "helping" your buyers you can also demand a premium and ask more for the house!
GOOD LUCK
Frogger, thanks for the reply. My holding costs are actually not that bad. I have an interest only note on it for under $500 a month. I am not even sure she will go for an early close (Feb that is) but I have emailed her to find out. We had originally factored in a 6% realtor commission, but I terminated the listing agreement to sell it myself, so we are still above our desired threshold. Wish me luck!
Thanks again.
Suntzu18
I still would advise to try to close early. You'll be able to finish up one project and free up your time and resources for the next.