OfflineOur latest fix and flip was scheduled to close this week however today we were informed by the bak that a second appraisal is required since the house is a rehab.And they want us the seller to pay for it! Has anyone else ever heard of this? They are also insisting on a detailed list of repairs that we made to the house.
The new buyer has already paid for a home inspection and a appraisal for his loan. What else will they come up with??
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"Don't tell me I can't, Tell me how I can."
Hey Donna,
This is very common on rehab flips with investors. Especially if the buyer is using FHA financing. Most lenders will require at least 2 appraisals just to make sure there is no mortgage fraud going on. Unfortunately during the boom market, many scam investors would get rigged appraisals done and flip properties illegally and unethically. Now all of us honest investors pay the price. Some lenders even still require up to 90-120 days seasoning as well, but I have a lender contact that I use to get around all that. =D
I recommend that you definitely start shopping around for local banks and lenders and/or mortgage brokers you can work with. Set up appointments with the brokers and explain to them what you do and ask about their process. You can really make it a win-win situation for the two of you if they are willing to work with you and make the process much smoother and easier. They get more business and you get your deals done faster! The one thing you always want to try and avoid is seasoning in case you fix a property and sell it quickly. You don't want to have to sit on it just because the buyer's lender says you need to hold that property 120 days before they will allow it to close.
Now if you have a couple local lenders on your side who provide good options, you can ask your end buyer to use your lenders to get the deal done more smoothly. You can give them multiple lenders to use so it doesn't feel like you are making them use just 1 bank. You can also offer them a $2000-3000 (or more) seller's assist for working with your lender. I also tell them we need to use our title company as well for that extra seller's assist money! They will definitely be more willing to work with your people than and your deals will close much smoother.
I also recommend doing the same for title companies. Shop for title companies who are investor friendly and who can do assignments and double closings when they are needed. Build your power team and life will be so much easier!
Good luck and I hope this information helps! =)
Thanks,
Larry
Check Out my blog at: http://www.theflipkid.com
"We succeed because we pay our dues to meet our goals, and in doing so we expand our personal genius"
Larry F.
The Flip Kid