 This week I bought a nice little ranch home. It has not been my biggest deal but it will make me a tidy little profit and it gave me an education at the same time. Here is how it went.
This was a bank owned property that the listing agent had a pre-signed contract done prior to it being posted on the MLS.
Fortunately the Bank has a 72 hour rule from listing date before reviewing contracts. Another offer came in through my office (different agent) with a financed offer.
Client has great credit (720 scores), sufficient money down with cash reserves and doing a FHA 203K mortgage with 45 day closing. Contract price was $41,000.
I thought this was a pretty good price as the “As Complete” value is $85-90,000. The 203K repair estimate was $14,000. I wanted the property but I didn’t want to get into a bidding war with a company client.
I decided to put in a “low ball” offer of $37,000 cash. Actually it was coming from a Line of Credit per my “Proof of Funds Letter” and a 30 day closing.
To my surprise the Bank took a cash offer 10% less than a well qualified offer with financing. Â Does this happen all the time? I am not sure, but as the foreclosure and short sale market starts getting more and more competitive, cash will once again become King!
So whether you are a principle or an agent, finding where you can get a good Buck when you need it should be top on your list. If you are looking in Buffalo or Niagara County for Real Estate financing or sales, give me a call, because in this area “the Buck stops here.”
Wow!!!!! That’s a killer deal! Below 50%..homerun here Wayne! Good Deal….gonna move this one on the fron page tomorrow..love to talk about deals like this!
The bank representative might have been burned in a previous transaction by a buyer with a “Pre-Approval” letter.
We’ve all seen those pre-approval letters that don’t mean anything.
“Buyer is approved for loan amount provided the credit score, income and assets can be verified” or something to that effect.
The buyer has barely been pre-qualified but the lender will write “Pre-Approved”.
Congrats on a great purchase!