We were under contract for a house with a closing date for December 29th. The house had been in the market for 1 year and after several price reductions, it was sitting at $1.599M. We made an offer of $1.52M, which was reluctantly accepted as long as we were able to close by the end of the year (sellers would be selling at a loss of $200k because the market is not like it was 1.5 years ago when they bought it…also selling it because they needed to relocate for family reasons).
After inspection, we got $20k towards closing. The house then appraised about $95k short of our offer, which meant our loan was lower than we were wanting. Seller gave us $20k extra towards closing to account for this.
We have been trying to get a loan approval with different banks but it has been tricky because half of income is 1099 with less than 2 years, and they don’t even look at it. We had to extend the loan contingency twice, and today was the deadline for us to get the loan or cancel contract and get our escrow back. We told the sellers we are still working on securing a loan that will likely be approved by one of the banks and asked for an extension until Jan 10th or cancel (with the holidays it was just impossible to make it work). They chose to cancel (understandably) and immediately re-listed the house in the market with a price reduction of $35k (now $1.566). They said that we can come back once we have the loan and can guarantee a short closing period, but that the price concessions will be much lower or nonexistent (we think they’ll only give us the $20k from inspection).
What should we do if we get the loan in terms of presenting a new offer? How would you go about it?
Thank you!
Posted by lolaina1007
5 Comments
First of all, I’d get a non-QM loan using a 1099 or a P&L or bank statement program.
If you can get an approval going then I’d just go back to the seller and let them know that you’re ready to get to closing and you’d like the original terms because they’d be able to close soon
I’m no expert, but it sounds like you can’t afford this house.
If you get to the point of a fast closing, they would be foolish not to work with you. Did they now disclose the repairs needed that were discovered by your home inspection?
You better make it a great offer or they’re not going to run the risk of messing around with you again. I don’t care what the weather is like in your area, the Spring market now starts in January.
I don’t think you’re getting a loan unless you can put more down.
I would go back at $60K below your previous offer and ask for no concessions. Or less. You were already at your previous offer – $40K. It’s still not selling.
That house isn’t going anywhere. And based on the appraisal, it’s overpriced.
>which was reluctantly accepted
Irrelevant. They either accepted or they didn’t. You don’t care if they were reluctant.
>sellers would be selling at a loss of $200k because the market is not like it was 1.5 years ago when they bought it
The market is what is it. What they paid is also Irrelevant.
>…also selling it because they needed to relocate for family reasons).
Also irrelevant. You generally don’t care why they are selling. You may care if it’s a divorce and they are desperate to be done – that gives you some negotiating leverage. Same if it’s about to be foreclosed.