All Forum Posts by: Account Closed

Awesome! congrats--make sure your agent doesn't flake out b/c Fannie has some pretty tight timelines on paperwork turn around. Should go smooth otherwise.

I suppose what you are saying is a bank might perceive less risk if the builder had a stake in the outcome?

I had not considered that point and there may be some validity. Bringing the experienced builder to the table would seem sufficient if you were in a position to bring the cash to the table without partners (that may not be the case here).After all, you are just supplanting your JV partners cash for personal cash-- it would seem this would not reduce lender comfort. Money is money after all!!

I would be curious to hear more details about the proposed home. Lot size and dimensions? Square feet of home-- bdrm/baths? Sounds exciting!

This sounds almost identical to the financials of my future custom home (minus the exit price at $1m-- more like 3,000 sq feet at 300/ft). A personal residence not spec build. I commented in a another thread partnering on new construction (there are two identical threads posted in different topic areas. This one was in a tax section). My main point was if I were to undertake the same activity as a spec build (which I intend on doing at a future date) I would find a builder working on a cost plus arrangement, rather than splitting your profits. You would realize more profit on a variable fee (cost plus 15 pct for example) and why shouldn't you realize more profit taking most of the risk?

Most Fannie properties are sold As-Is. Under these circumstances an inspection item would not help open negotiations again.

I wish I could convince my wife the personal residence play, as it was called in this thread, was a great way to accumulate a nice coffer. When I mentioned I was looking for another lot to build a custom home in 3-5 years (rental in the interim) she did not seem too keen on the disruption this could cause young children (the same neighborhood and school no less).

good luck! I should have been more clear about my "counter both parties" comment. this counter would have come with the multiple offer round notice and it would have been a counter at list to both parties. it sounds like you advanced past the multiple offer round already. I spent three months negotiating back and forth with Fannie. (started at a absurd list price) and finally closed on my dream building site ("tear down") earlier this year! Once under contract... the process and closing went smooth.

Of course non of this is applicable if you have been notified you won the multiple offer round and are negotiating with Fannie exclusively. But two effective strategies for winning multiple offer rounds and getting a Fannie house under contract.

Here's a different Fannie offer strategy on the the other end of the spectrum which worked for me once on the only occasion I tried: Fannie has a record of terrible CMA's and high initial listing prices. If you have a really good handle on comparables and can get fairly precise on your estimate of fair value (and are willing to pay fair value), make an offer more than your willing to pay to ensure you best the other offer. When the appraisal comes in short Fannie routinely will amend (based on my personal experience and observed others in my community) to the appraised value (within reason-- less than 10 percent reduction). Your financing contingency will give you an out if the strategy doesn't work and as long as the other offer wasn't a cash offer they are likely not going to begin listing again. food for thought- a risky strategy but it can be effective.