Seasoning is the term used to describe a period of time the title has been in the purchaser’s name. Lenders like to see a 10-12 month period of ownership. Lenders have been burned in the past when properties would change ownership quickly and lend on unstable appraisals. If foreclosure would occur, the property was upside down.
For Example: We have a contract to purchase for 100K on a $150K valued home in January 2003. (the unit is 10 years old nice location, no rehab needed) If we try to sell for $140K in February 2003, the lender will research the last sale (title search) and in most cases, request title seasoning and reject to offer funding. We have heard that some lenders will not request a new appraisal and use the January appraisal. This could cause a snag for the new seller.
Now that you know what title seasoning is, in my opinion, it should not affect wholesaling. As a wholesaler, you are selling to other investors and rehabbers who should be able to bring either their own cash or hard money financing to the table.
Seasoning is the term used to describe a period of time the title has been in the purchaser’s name. Lenders like to see a 10-12 month period of ownership. Lenders have been burned in the past when properties would change ownership quickly and lend on unstable appraisals. If foreclosure would occur, the property was upside down.
For Example: We have a contract to purchase for 100K on a $150K valued home in January 2003. (the unit is 10 years old nice location, no rehab needed) If we try to sell for $140K in February 2003, the lender will research the last sale (title search) and in most cases, request title seasoning and reject to offer funding. We have heard that some lenders will not request a new appraisal and use the January appraisal. This could cause a snag for the new seller.
Eric & Rosa
[addsig]
Now that you know what title seasoning is, in my opinion, it should not affect wholesaling. As a wholesaler, you are selling to other investors and rehabbers who should be able to bring either their own cash or hard money financing to the table.
[ Edited by brooke on Date 11/16/2003 ]