How Can My Client Flip A Home That Was Listed The The MLS?
Good morning,
I have a client that is purchasing a home listed on the MLS, he would like to do the required repairs and finance it at a higher price in about 60 days.
What can he do to make this an easy proccess. This would help me out as well as they are purchasing these properties below MLS price but after rehab large or small is complted they want to resell the properties at full appraised/market value.
I am assuming that you are concerned that someone will see the old pricing info. It does not matter that it was listed in the MLS before as each time it is a new listing. The average person will not see the listings that already sold.
One thing that I advise is to make sure you take good before and after pics and document EVERYTHING that you do to the property. At 60 days out you are going to run into possible seasoning issues with the mortgage companies who normally like to see more than 60 days seasoning.
What exactly are you worries? Are you worried that the retail buyer will not want to buy it for 100k if you purchased it for 70k? Are you worried that the retail buyer will not be able to get a loan because of seasoning? What is the problem?
People buy houses all the time from the MLS, rehab, then resell on the MLS. I am doing one now.
WOW! I first want to say this is the best place to get the "right" answers. My concern yes, was that the buyer would not be able to financing on the new increased price. I purchased the home for 50-55 cents on the dollar I will be selling it for market value with a discount.
The lender may have a problem with the MLS listing.
Also the buyer said they have had problems in the past selling homes they purchased for peanuts and then attempting to resell at full value. I want to avoid and long term problems for my clients.
I buy houses at a discount, rehab them, then sell them for full retail value. This is what a rehabber does. Where he buys from direct mail or the MLS, or he sales FSBO or the MLS - it does not make a difference. When I sell a house I include a "No FHA or financing that has seasoning or chain of title restrictions. Seller purchased the home on 9/1/06. Financing preapproval letter required with all submitted contracts". I call the mortgage broker and ask which lender will the buyer use and if they have title seasoning issues. The broker rarely understands what you mean so I tell him that I bought the house 2 months ago at a significant discount. Will that be a problem? He always says no, but I make him give me his managers name and I call the manager and ask the same question. You could even make them give you a letter stating such prior to your accepting the contract.
As a Realtor, I always check the history on the MLS and give that information to my clients. They presumably use this information in formulating their offer. It is important that the new listing specify all the work that has been done since the last purchase, or the buyer will only allow for reasonable appreciation and profit margin in their offer.
Chris
My only issue I have seen here locally in MN is the lender questioning the appreciation and the appraisal.
I have seen it many times where the old recent mls history will make the lender fishy