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Bought a house today, hope to sell it in a month???

Melensdad

Jerk in a Hawaiian Shirt & SNOWCAT Moderator
Staff member
GOLD Site Supporter
Well I think sometimes bank bureaucracies are just stupid.

A friend of mine is a real estate agent. He has been trying to sell a bank foreclosure house for the past year. The bank will not sell it to a real estate agent so my friend can't buy it.

There is a PRE-APPROVED BUYER who wants to buy the house.

But the bank that owns the house ONLY wants to sell the house for CA$H. The buyer is pre-approved for a FHA loan up to $150,000. The bank agreed to sell me the house for $105,000 cash, I have an agreement (not a contract) from the buyer to buy the house for $130,000.

It is a possible risk that the buyer may back out. So this is not a 100% sure deal for me.

But what I don't understand, and I mean I simply can't wrap my mind around this at all, but if the buyer is willing to pay me $130,000 then why is the bank that owns the house unwilling to sell it to that same buyer for $130,000?

The bank that owns the house is NOT the bank that has pre-approved the buyer for the mortgage. So what I can't grasp is if I am going to walk away from closing with $130K in cash then would not the bank that owns this foreclosure also walk away with the same money and pick up $25,000 in added profit above their selling price of $105,000? Why is the FHA loan a deal killer for the bank that currently owns this foreclosure house?

Can anyone begin to explain this to me?
 

muleman

Gone But Not Forgotten
GOLD Site Supporter
Portions of the house may not meet FHA standards. They have some silly rules about what has to be done to a property to meet their inspections. Maybe the bank holding it now is on a watch list from the FED and can't add this type of property to it's portfolio.
 

Melensdad

Jerk in a Hawaiian Shirt & SNOWCAT Moderator
Staff member
GOLD Site Supporter
In this case the buyer is a general contractor, he is willing to do the repairs at his cost, before closing. The house was appraised at $189,000. The kitchen had granite countertops, which were stolen. So the contractor/buyer will have to do some kitchen repairs, at his cost.
 

OhioTC18

Gone But Not Forgotten
GOLD Site Supporter
I'm sure they are concerned about any inspections and paperwork that may result from a sale with a loan. Maybe the buyers bank or FHA says no. They are back to square one again. With a cash deal, you bought it buddy, it's yours.
 

Melensdad

Jerk in a Hawaiian Shirt & SNOWCAT Moderator
Staff member
GOLD Site Supporter
I'm sure they are concerned about any inspections and paperwork that may result from a sale with a loan. Maybe the buyers bank or FHA says no. They are back to square one again. With a cash deal, you bought it buddy, it's yours.

Well that is all I can see as a hang up too. I know there has been a lot of activity with this house, its in a historic district and is beautiful with lots of character. As I said, I hope to flip it over to the contractor pretty quick, but if not I believe I can pay for repairs to the kitchen and sell it pretty quick for $150 to $160K.

The bank has been sitting on this house for 15+ months, and it was only about 45 days ago that the kitchen counter was taken out (no sign of break in, removed the same day that the bank's home inspector was in the home, police believe inside job but can't prove it).
 

grizzer

New member
Since the bank is willing to sell, it's not being used to cover overnight positions.

I'd do a thorough title search and drop a check on the bank for $90K saying the prices have dropped due to the $8K govt credit being dropped.

This will give you more negotiating room on the flip, since it's been stripped, time and degradation is an issue.
 
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