Selling Contract Before Closing

[Joseph Lalia]

Hi all,

Long story short, I went under contract more than a year ago on a condo (new construction) in Denver at just under 400k, and just finally got my appraisal today at 445k. 

Unfortunately, I was not able to lock any rates prior and was using a non-qm loan due to DTI issues. Terms were also unfavorable, going from 10% down to 15% down at 7.35% with 2 points at closing and a 5yr prepayment penalty of 6 months interest.

Rental estimate is app. 2250/month which would leave me covering and additional 600/month out of pocket.

Am I right to consider selling this contract, if even possible, and if so, can anyone point me in the right direction? Based in Florida, at present, so that doesn't make it easier.

Thanks in advance!

[Kevin Smith]

Hey @Joseph Lalia

I'm guessing your builder's contract is not assignable.  In which case, you would not be able to "sell" it before closing.  You'd want an attorney to review it, but look for language around assignability.  Keep in mind, when assigning, the new buyer is typically a cash buyer, so you avoid financing issues.

I would also shop around with some other lenders to find some better terms.

Finally, have you considered the furnished rental route or renting by the room? If it's Denver proper, you wouldn't be able to do a nightly rental, but you could do a so-called medium term rental where you rent it for at least 30 nights at a time.  Typically, these bring in more than a traditional long term rental, in which case you may be able to cover your mortgage until you can sell or refinance.