Closing Soon Need Help
I am selling my income property with a construction loan attached to it. There have delays for over two months due to lack of communication from realtor on buyers side. Previous deal realtor and seller had with another buyer and my attorney was a part of the deal that went ugly at closing because attorney didnot direct money to seller at closing he eventually got his 20k.
My problem is my attorney uses a title co. that will not allow distribution of construction funds at closing, so the buyers realtor and I agreed to pull title from another company that she has used in the past that will allow it. Spoke to her yesterday and she has ordered title and wants my payoff which I will be giving to the attorney that I requested from her.
I want the letter of direction to state that I would receive the amount that was discussed, pay all closing costs, and the remainder goes to the construction company.
Will the attorney draft the Hud 1 form to my specifications and also will this deal go bad if I use an attorney that she has given me I am running out of time soon going into 3rd month of preforclosure.
I have other income from job in the 10% tax bracket. Bought the property in Jan. 2003 filing single what are my tax liability.
Please help donot want to get screwed.
Not dure about NY but that is illegal is in some places in it considered fraud.
You can check with the banks about a mortgage that has rehab costs build in like a FHA 203(k) or Bank of America or Wells Fargo rehab loans
Seller can escrow repair funds, but banks usually balk if the percentage is that high. It is legal as long as the LENDER is aware of it, not the seller.
Chris
When I did it, I had close to 20k in repairs on a $115k house. Seller credited similar to what you are saying. All the work was done prior to close. This was NOT a construction loan. It covered a new roof, bathroom and other fixups. Bank required me to have a certain percent in equity in the place (down payment) and there were no problems. Everything was disclosed on the HUD statement including the contractor estimates for the repairs.
I agree with Chris, I think 40k might be a bit high unless you have a BIG down payment, but the lender will let you know.
will a FHA 203k loan or other rehab loan work for you? Wells Fargo (I was shopping, no endorsement) seems to offer both.
The repairs are 26% of the purchase price. Not 40% as in my example. Thanks for the info. I will talk to the lenders and see what they can do And if not I will look into other lenders that do these types of loans.
i just found a similar type property owner asking 249k
needs about 85k to bring up to full value estimated to be 385-400k based on similar properties listed for sale. he owes nothing on it. property wont appraise well due to the fact a renovation of some sorts was started then abandoned.
going to offer 160k with him holding note for 30 months.
. I will rehab then either sell or rent and refi to pay him off.
maybe you can work out something like it. another seller offered to gift me and my wife 24k to buy his property
trouble was it still didnt cashflow. you can accept monetary gifts upto 12k per person to person, per year legaly and tax free..
good luck
KJ
[ Edited by kevnhl25 on Date 08/15/2007 ]