All Forum Posts by: Matthew MacDonald

I also tried to have them apply the credits to more impound accounts, but that is also a no-go.  It seems that since I received credits from the Seller I will not be able to use any remaining credits towards a paydown of the principal balance.  I will just have to live with buying down the interest rate for now.  Not the exact outcome I wanted, but at least all of my closing costs are covered.  I will close on the house tomorrow and can then focus on getting it ready to rent out.  

I'm in the process of buying an SFR in San Diego, CA with an FHA loan (3.5% down payment, 5/1 ARM). The plan is to live in the house while we add on, remodel, etc. After a year we will refinance the FHA loan into a conventional loan and rent the house out.

I received $5,000 in credits from the Seller, and $1750 from my real estate agent.  My closing costs are completely covered now and I have roughly $1200 leftover from the credits. My mortgage broker has said that I can only use the $1200 to buy down my interest rate ( I don't believe him).  I really do not want to buy down the rate as the savings will not be realized since I plan to refinance so quickly.  

My question is if on an FHA loan you can use the credits towards the principal balance rather than buying down the rate?

The Seller had tried to lower the listing price on the home and sat on it through the weekend.  The Seller's agent contacted me today, and we are going into escrow now (wish me luck). 

What helped the Seller make the decision was by me adding "Buying in As-Is Condition, there will be no repairs, unless mandated by appraiser." 

The Seller and I have made 3 rounds of counter offers.  Her last offer was $420K with no credits.  I countered with $424K and $5K in credits.  I found out from the Seller's agent today that the Seller is now "afraid of me."  She feels like I have "beat her down" from her asking price, and that during escrow I will find more ways to lower the purchase price and make further demands should the home inspector find any repairs that are needed.  The only solution I could come up with was to say that I am taking the house "as-is."  

Have any of you experienced a situation like this, and how did you handle it? 

Thank you all for your insights and comments.    After my offer, the listing agent changed the wording on the listing: "Seller will provide closing cost assistance and prepay existing 20 year solar lease. Or, if buyer chooses to assume solar lease, seller will provide decorative allowance for home upgrades. Seller concessions based on receipt of full price offer."  I will keep my eye on it, but I have already found two other houses to make offers on.  There is always another deal just waiting around the corner (no literally one of the houses is 4 blocks away). 

The Seller had been transferred to Atlanta for work, and are concerned about paying two mortgages (it's been on the market for 41 days and had a $26K price cut in the beginning of September). I found out that the house had been in escrow with a local flipping company, but the deal fell through. They estimated an ARV of $510,000, which seems about right based off the comps for the area. They also estimated $45-50K in renovations, which is higher than what I would have paid being as this would have been an owner occupied investment with my renovations costing around $26K in materials and outside labor for the renovations that I would not perform the labor on myself. The seller is asking $449,000 and I offered $380,000 (I could justify going up to around $400k maybe $410K). The plan was to use an FHA loan (I've been pre-approved), refinance after a year, pull the equity out and repeat with another house while renting out this one.

Good morning from sunny San Diego, 

Over the weekend I made an offer on an SFR that is currently on the market. The Seller's agent let me know that the Seller rejected my offer, and is not interested in negotiating the price because my offer was "too low." Have any of you ever had this happen? Would it not be more beneficial to the Seller to at least try one counter offer with me to see how much higher I would have gone on the house?

Looking forward to seeing others experiences with situations like this