Approved Short Sale - Challenging Conditions
Appraised AS IS value = 95,000
I was wondering if anybody has any suggestions for my dilemma - Lender #1 approved short sale on an FHA mortgage (82% of appraised value=$77,900)
Lender #2 is only allowed to receive $1000. on the HUD-1 at closing (not a problem, got the rest worked out with 2nd prior to closing)
So far, so good but now comes the complications
Lender #1 is stipulating that the offer must be 95% of the "as-is appraised value" = $90,250 and of course the seller is not allowed to pay any of the buyers closing costs. There is a 6% realtor fee to build in, but I'm having trouble getting to the agreed upon $77,900
I welcome and appreciate any suggestions - Thanks in advance
Look back through you paper work from the lender. It is usually 82% of the as is value. But the 95% will be of something else. Reply back with the exact wording in the short sell information regarding the 82% and the 95%.
Brenda
Hi Brenda- thanks for responding
Lender #1, condition 1: (Irwin) stated "The Sale Contract offer must be at least 95% of the appraised as-is value of the property."
Condition #2: " The Net Proceeds must be a minimum net of 82% of the "As Is" appraised value.
these are the conditions which I am finding to be contradictory.
Thanks
The mortgagee is willing to accept not less than 82% of the property's confirmed, as-is fair market value. They'll order an appraisal to confirm it's value before they approve an FHA preforeclosure short sale.
Let's say that the value is $95,000. That means that the FHA will accept net proceeds not less than 82% of the FMV, or, $77,900.
The Contract for Sale must have a sales price of not less than 95% of the FMV, or $90,250.
With a gross sales price of $90,250.... after deducting for costs of sale, including r/e commission, transfer taxes, Seller's closing costs, and $1,000 for the junior lienholder.....
The lender must get a check for not less than $77,900. The Seller must get $0.
[addsig]
Ask them that if thier net of 77,900 is most important - it is. Tell them that you do not have $13k of closing costs and you would hate to make them up. So what should you do?
Brenda
Sorry, I did not read it quite right. But still the concept is the same, ask them about it. See if they insist on the contract price of 95%. Wonder if they will allow any crazy items on the HUD for repairs or .....
Brenda
The mortgagee's acceptance usually reads: NOT LESS THAN a specific sum. Once the have the HUD 1, they'll indicate the precise settlement amount.
[addsig]
Thanks for all the suggestions-
Just to give an update on how things are going I presented another contract offer today (just ignoring that 95% of appraised "as is" value. I made sure after preparing the preliminary net sheet , lender #1 nets slightly ($149.00) over the bare minimum 82% after all closing costs, taxes and realty commission. Bank called 5 min. , after I faxed the offer and net sheet this morning, and told me that they are ready to go ahead with the sale, The offer looks good and I should order title work .
Thanks for all the help. Thanks Brenda