All Forum Posts by: Sean Dougherty

Is it doable? Lien $450k, homes current value=$400k

 Thanks Karl,

That's what I was concerned about, the lender. I suppose it depends on lenders guide lines. Would you happen to have a link to that addendum. I'd love to take a look at it. 

Hey all,

 I am in process of selling a flip. Market is going crazy here in Hawaii, so I am getting many offers way above asking price. Unfortunately I do not think the home will appraise at those prices. All offers involve FHA loans with 5% down.

Here is my idea:

Strongest offer is $520k. I believe home will appraise for around $500k. I am thinking to counter offer with a stipulation. Something along the lines of:

"Purchase price will be adjusted according to the appraisal amount. But whatever the difference is between that amount and the aforementioned $520k, that will be paid to seller over time on a monthly basis. A separate contract will be drawn up for this transaction with terms to be determined."

Only draw backs I can think of:

1.Lender may have a problem with a 2nd loan being involved. But really this would be a private transaction with a separate contract between buyer and seller. No need to disclose to lender.

2.Realtors not being willing or educated enough to implement this strategy.

Any feed back is appreciated. Thanks!!!

Hey all,

So I am in process of selling a flip. Market is going crazy here in Hawaii, so I am getting many offers way above asking price. Unfortunately I do not think the home will appraise at those prices. All offers involve FHA loans with 5% down.

Here is my idea:

Strongest offer is $520k. I believe home will appraise for $500k. I am thinking to counter offer with a stipulation. Something along the lines of: 

"Purchase price will be adjusted according to the appraisal amount.  But whatever the difference is between that amount and the aforementioned $520k, that will be paid to seller over time on a monthly basis. A separate contract will be drawn up for this transaction with terms to be determined."

Only draw backs I can think of

1.Lender may have a problem with a 2nd loan being involved. But really this would be a private transaction with a separate contract between buyer and seller. No need to disclose to lender.

2.Realtors not being willing or educated enough to implement this strategy.

Any feed back is appreciated. Thanks!!!

Thanks for the answers. I'll briefly fill in the holes of the story here so it may be more clear. The property in question I have been on it for over a year. It was a probate property and I have been dealing directly with the special administrator since that time. I've been inside it months ago and I ordered a contractor repair bid for the work needed. I could not get a deal done at that time and property has been listed. Due to covid this particular property is not being shown. Due to the disrepair as well as permitting issues as well as the issue of no one being able to see inside, there are no offers are coming in. It has been two months now. Because of my past history with the property I am aware of work that is required. Also I am aware what the minimum acceptable price is. I am not interested at that price but I am confident other investors may be. 

 There seems to be a conflict of interest considering that once end buyer knows the purchase price, what would keep him from backing out of the deal and then going directly to listing agent thus avoiding the middleman and assignment fee?

Yes that is all how I understood it as well. Home is not in Bankruptcy. I have bought other homes in this way and it has never been an issue that commissioner is assigned. This is in Hawaii with a local Bank as lien holder. Both Bank of Hawaii and the commissioner have told me that homeowner has no right to sell the home and everything must at this point go through and be confirmed by commissioner and court system.

The lender in particular was very rude and standoffish and wouldn't speak with me much even though I had a 3rd party authorization from seller. They told me I would have to do all negotiations through the commissioner as he was now legal rep for the property. From my experience with other banks they are usually quite accommodating considering I am offering to fully payoff a delinquent mortgage.  

I have contacted foreclosing attorney and told them the situation and they are contacting the lender on my behalf to see if they can dismiss commissioner and allow the sale.

Yes sir, Subject to is entirely possible in this situation. It really just depends upon the specific hardship of the property owner. Subject to can be done at anytime during the foreclosure process as what you are doing is paying off the arrears to cure the default. It is somewhat complex but can benefit both parties.

Long story short: Preforclosed home that was scheduled for auction just before the moratorium. I have owner on board to sell. I contacted lender and they are saying that at this time the court assigned commissioner is the only one who can sell the home. The Home owner has no legal right to sell and it must go through the commissioner. I have contacted the foreclosing attorney to see if it is possible to dismiss commissioner and allow a standard sale outside of the courts. 

Any suggestions or pointers here?   

I forgot to mention that the estate is insolvent. No other assets.  Therefore a short sale would not affect it regardless of how short.