All Forum Posts by: Ed Wood

buy and hold conventional financing or hard money for a flip?

@Account Closed

Just the escrow fee nothing else is fairly common to split 50/50 in Southern California. Has nothing to do with trusting a title company most have the split option on the net sheet or when providing quotes or estimates. You can take a survey of 100 escrow officers and they'll tell you the same thing.

Regarding REO companies some will do a split 50/50 however on their side of the split there is a discount for example if escrow was $1400 split 50/50 that is $700 each side then the REO company shows a discount line item say $200 so net escrow fee to REO company is $500.

@Jason Merchey

Simple, here's the scoop. Purchase loans are non-recourse, refinance loans (especially cash out), cash out 2nds or HELOCS are recourse loans.

The key difference and why this is is because when you cash out a property you receive cash so the lender has recourse to get that cash back whereas with a purchase the full amount is used to purchase the property therefor the lender can only sue for the property.

Non-Recourse States (each state is slightly different):

Alaska
Arizona
California
Connecticut
Florida
Idaho
Minnesota
North Carolina
North Dakota
Texas
Utah
Washington

@Account Closed

Yes it does, default is 50/50 however as you can see you can use the slider changing the ratio this is just the escrow fee. Not sure why you're thinking it includes loan, tie-in, or notary fee's those are separate from the escrow fee. I went ahead and filled one out so you can see.

@Account Closed

There is a differences between escrow cost and the escrow fee. You are absolutely correct the escrow cost are different for the buyer and seller, however the escrow fee which is included in the sum of the escrow cost are commonly split 50/50. This 50/50 method is so common it's implemented in netsheets provided by title companies and the Realtor association please see link provided in my last post and below screenshot.

@Pete Tam

Each area has a "common for the area" or "traditional for the area" for example Northern California is different from Southern California where as in NoCal the buyer pays for owners title and in SoCal the seller pays owners title. With that said here is what is traditional for Southern California.

Escrow Fee: Split 50/50 or "each pay own" pretty much means the same.

Owners Title: The seller pays owners title.

HOA document and transfer fees, Transfer Taxes: Paid by the Seller

Lenders Title: Paid by the buyer

For estimate you can use a title net sheet here is a link to one

http://netsheet.firstam.com/

I believe it's minimum 10 but in areas with less properties it's 5....

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@Dan Seavey

It's a great plan but no lender will do it here's why.

Lenders only lend on appraised value or the sales price whichever is lower. So here's the scenarios:

1) If you have a purchase contract for 175k (and it appraises at 175k) you'll need to put down $43,750 of your own money.

2) If you have a purchase contract for 75k and the property appraises for 175k the loan is based off the purchase price of 75k because the purchase price is lower than the appraised value. You will need to come in with the 25% down payment based on 75k which is $18,750. Then you would need to do your 100K promissory note with the sellers of which you will need to let the lender know the terms because you must disclose all your liabilities when applying for a mortgage.

make sense..?

@Dan Seavey

we've got to back up here. Your original post is below you are thinking?

Thinking the property would appraise for 175k you would do a conventonal loan for 75k because of the equity you would not have to come in with a down payment as far as the lender was concerned, then you would do a 100k promissory note to the seller? So in essence you're getting 100% financing?

Clarify this for me and then I can answer the question. : )