We are scheduled to close on our brand new 2003 home on Friday but the Title Co. just found out that the Realtor that we are purchasing the home from bought the house in May of 2003 for only $170,000 and put it on the market in Aug'2003 for $251,000. Our lender is threatening not to close this deal unless she has a good reason for re-selling so high. What can we do???
WHAT IT "WAS" SOLD AT HAS NO BARRING ON WHAT YOU OR ANYBODY ELSE WILL PAY... WHAT DOES IT APPRAISE AT??? IS IT ONLY NOT A FAIR PRICE BECAUSE SOMEBODY BOUGHT IT CHEAPER IN MAY??? My store buys STUFF below RETAIL to make a profit... ALTHOUGH $81,000 is a pretty big chunk of PROFIT ARE THEY INFERRING---FRAUD???
The problem I could see is that the real estate agent or real estate company purchased it. If it was an individual, I could go along with GEORGE's point, it only matters what it's appraised for and what a willing seller will pay. But I think the complicating factor may be the real estate involvement. In many cases, there are ethical, if not legal issues with a real estate professional doing this and not making an up front disclaimer. So it is a sort of fraud. They probably don't want something to happen later and this come back on you. I don't know if it could cloud the title or not. For example, if this is illegal, could the government seize the property? It may be something like that, and it worries them. Why not talk to the lender and ask some of these questions, see what she says.
Re: Re: Flipping Real Estate So it is a sort of fraud. LIKE INSIDER TRADING??? THE PREVIOUS OWNER IS ALWAYS SAID IN THE DOCUMENTS
Re: Re: Flipping Real Estate BUY LOW SELL HIGH IS ILLEGAL NOW??? So we MUST sell all our merchandise now AT COST???
Re: Re: Flipping Real Estate I highly doubt a mortgage company would turn down the loan if it appraises. The mortgage company picks the appraiser, so the value would not likely be questioned. I am a Realtor and many Realtors buy property at a discount for investment. They often have relationships with builders and can buy property at discounts just so the builder can get the property moved. If the mortgage company is balking, there is likely another reason. Like George mentioned, as long as the price you pay is market rate or less, a mortgage company wouldn't care.
Here's another question. If the investor is a pro. real estate agent, why has it taken him 150 days to "flip" the property? hhmmm? ??? .
I **think** Hedwig is right about the fraud issue. If the property was acquired by the RE agent by means of fraud, it could make the sale voidable.....which would cloud title and it's marketability. Many times, RE agents represents sellers in the sale of their home. But for one reason or another, the RE agent decides to buy the house. At this point, the RE agent is no longer an agent to the seller and no longer represents the seller's best interest in the sale of their home. Once the RE agent shifts away from the agent to a buyer, FULL DISCLOSURES must be made to the seller. Misrepresentations of pertinent information in these disclosures certainly can construed as fraudulent on the agent's part. But if the necessary disclosures were made and were complete and accurate, then this shouldn't be a problem to your lender, if this is how the RE agent acquired the property. Ask the RE agent how they acquired the property.
posted by Butch I just don't want her to pay 80,000 more for a house than it's worth. -------------------------------------------------------------------------------- That's what we like about you Butch. You have our best interests in mind Common Cat Ailments ============================ How can it be 80,000 more than it's worth if it appraised for the selling price? THE END ** *** ** LB 59 """"```--~~~~~~~~~--```'""'''
Since its a "brand new" home - I'm assuming its a new build. Could the realtor have bought it and completed the build out themselves? Really doesn't make sense...research the original builder.
It was appraised at $255,000+. She is selling it at $251,000. She told my realtor that she did finish off the house by adding the fourth bedroom and the full bath in the fourth bedroom. So, she bought it at 170,000 and put $10,000 worth of work into it.
I contacted the builders and the price quote that they gave me to have a house built with the same features that the house I am trying to purchase was $252,000. So how do they figure that this woman is trying to get over on us. If we are willing to pay that much for the house and we qualify for that amount I don't see the problem.
Re: Re: Flipping Real Estate Well, there's your good reason. Tell the mortgage broker to take a long hike off a short bridge. Geez, I'm a realtor, and never had to apologize for a client making a nice profit. Are you in TX by chance? I'm seeing a lot of new builds that have roughed out areas for the homeowner to do with as they like. (Sometimes called a bonus room). Its becoming SOP. Ethics would come into play, if the realtor bought low from some financially strapped individual. Something like an unsophisticated individual vs. Big Bad Evil Real Estate Agent. But, if she bought from a builder, he should have had the knowledge to make a business decision, since home sales are a part of his biz.
Re: Re: Flipping Real Estate I heard that 1 guy bougt a foreclosed house for $150k and tried to sell it $180k. The buyer could not find a mortgage company to finance 180k. Those mortgage companies found out that it is a foreclosed house and would not finance more than the foreclosed price. The seller then carried the 2nd mortgage as owner finance for rest of the money.
