Tuesday, August 27, 2013

Contingent On Sale Is The New Skinny

By Justin Haines


I guess it did not struck me at first yesterday, I was speaking with a fellow friend, another Phoenix Loan Officer just like myself and she was indicating that she was doing work in her words a "contingency chain". I told her to shed some light on this and she explained this in brief. Buyer "A" is investing in Buyer "B's" home but must sell his house first, customer "B" is paying for buyer "C's" home but needs to close on the sale of his home to Client "A", buyer "C" is paying for customer "D's" house but should close on the sale of his home to Client "B."

So if you're like me you should return and re read this specific sentence two times to fully understand it. In this instance my fellow loan officer friend is performing the loans for all of these transactions, and she explained that this was the best approach of undertaking the contingent on sale kind transactions. She could guarantee that she can dig in and be sure there was not gonna be any snags on the funding for ANY of the borrowers, since if someone was to drop the ball on one of the financial loans the whole thing could perhaps break apart.

I am not completely too sure, but something must be taking place in our market as I moved back to my workdesk to evaluate our current deals and we have 2 of the same style of transactions, not really that many contingent on sale deals together but we have two separate clients who've decided "hey, we could make some money on our home that we purchased a few years ago, why not roll that into a new purchase". What an amazing principle right?

Here's where the option could get a little bit tricky.... It's best that you ensure WELL ahead of time that your phoenix loan officer can perform with all the possible troubles you can have. By having this discussion far ahead of time, you can ensure that you'll not end up homeless for several days. When the cash to close or the cash which it takes to close the brand new purchase come from the sale of your recent house you may come across a snag with your present loan provider. I say you MAY for the reason that all loan companies are slightly different... Mainly because that cash to close is not yet in your own account you'll be wise to have your Phoenix Loan Officer talk to their underwriter on whether they will accept an expected HUD with a sales agreement of the property you're selling and allow you to get files to the title company on your new investment.

From here, it is ideal that you deal with the same title company on the sale of your house and also the purchase of the new property that way you do not worry about the wire from the sale taking a too much time to get to another title corporation for your investment, that could develop a serious mess. This is something your agent must help you coordinate, if you do not have a fantastic realtor to coordinate a negotiate call me now and I could get you introduced to a few best real estate agents who've a success rate with these types of transactions, your real estate staff MATTERS.

Once again, contingent on sale deals require a little more skill, in the event that you think your loan officer has difficulties with yours I am here to guide you navigate and coach them through it.




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