LENDER ASKING TO MANY QUESTIONS
I bought a three unit brownstone at a foreclosure auction. I paid 156K. Within two weeks I had a contract to sell the property for 190K. Now, the buyer's lender is inquiring why I am selling it for 190K when I paid 156K. The lender wants confirmation from me that I did some work on the property to warrant the hike in price. I have not done any work as no work is needed. It appraised at 200K. I explained to the lender that I bought the property at a auction and it is my business to buy and flip properties. The lender does not seem to be satisfied and the deal looks like it might die.
Anyone else ever have a buyer's lender get so inquisitive.
Hi Murtishi,
Yes it does happen sometimes. Often times the appraisers call me while doing the appraisal to ask how I bought it so cheap. I always tell them that I bought it out of foreclosure and simply paid off the mortgage. They state this in the appraisal and there are no problems after that.
Now if bank that is hasseling you, there is a simple answer to that as well. Have your buyer get a new lender. If he is interested enough, he will do just that.
I dont know your buyers situation, but it sounds like he may be applying for a sub-prime loan. Is this the case?
BAMZ
[ Edited by BAMZ on Date 11/05/2003 ]
Be proactive!
Anticipating problems is the first step to avoiding problems.
If your business is dependant upon someone else buying your product... it's a good idea to know, in advance, where to send your Buyer for the financing he/she will need to complete the cycle.
Spend an hour, a day or a week interviewing potential lenders.. to send your stream of Buyers.
Most lenders will require 12 months title seasoning, especially if you are selling for 20%+ more than you paid for it. If you have this problem in the future let me know I may be able to help.
You can eliminate that problem by doing what the SHORTSALEPRO suggested above ....
"Spend an hour, a day or a week interviewing potential lenders.. to send your stream of Buyers. "
BAMZ
The advice from Short Sales Pro is correct. Lenders have the leverage to enforce that customers adhere to their lending guidlines. In our opinion: NEXT lender you may also see if your current mortgage lender will refinance to the new buyer. According to your post their appraisal documents that the unit is worth $200K. Hang in there, you are doing a good job!
Eric & Rosa
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Keys to our business success: Knowledge, listening, caring, and credibility.[ Edited by classimg on Date 11/06/2003 ]