JaguarCrazy2832 Posted June 11, 2019 Share Posted June 11, 2019 On 6/4/2019 at 2:26 PM, MikeT14 said: So we are selling our house. Buyer has been taking their sweet time with the inspection report and bringing in "specialists". The due diligence period ends Friday. We just found out today that buyer is switching from a conventional loan to an FHA loan. Probably why they were dragging their feet on getting an appraisal done. What can I do to protect myself? I feel like this is about to go south quickly. I'm sorry its been a week since I saw this but my only advice would be talk to your realtor Quote Link to comment Share on other sites More sharing options...
MWil23 Posted June 11, 2019 Share Posted June 11, 2019 On 6/4/2019 at 2:26 PM, MikeT14 said: So we are selling our house. Buyer has been taking their sweet time with the inspection report and bringing in "specialists". The due diligence period ends Friday. We just found out today that buyer is switching from a conventional loan to an FHA loan. Probably why they were dragging their feet on getting an appraisal done. What can I do to protect myself? I feel like this is about to go south quickly. That would be a major red flag to me. Has the appraisal been done yet? FHA lenders are a lot more conservative on the appraisal of a house. Speaking from experience, we got SCREWED OVER on ours because of it. How long was your house on the market/how much interest was there? That appraisal, when it comes back, will be tied to your house for 6 months for ANY FHA loan/potential buyer. 1 Quote Link to comment Share on other sites More sharing options...
skywindO2 Posted June 11, 2019 Share Posted June 11, 2019 My recent experience with trying to buy a home, the loan type was included in the purchase agreement. The buyer changing the loan type would change the terms the seller agreed to, wouldn't it? Shouldn't the seller be able to cancel right there? Quote Link to comment Share on other sites More sharing options...
theJ Posted June 11, 2019 Share Posted June 11, 2019 4 hours ago, skywindO2 said: My recent experience with trying to buy a home, the loan type was included in the purchase agreement. The buyer changing the loan type would change the terms the seller agreed to, wouldn't it? Shouldn't the seller be able to cancel right there? I would think so yes, but maybe it's different state to state? The buyer changing loan types in this fashion probably means they either spent some of their downpayment (5% min on conventional vs. 3.5% on FHA) or their conventional loan lender was about to turn them down because of their credit score (FHA will take down to 500). It's definitely a red flag. 1 Quote Link to comment Share on other sites More sharing options...
theJ Posted June 11, 2019 Share Posted June 11, 2019 On 6/4/2019 at 2:26 PM, MikeT14 said: So we are selling our house. Buyer has been taking their sweet time with the inspection report and bringing in "specialists". The due diligence period ends Friday. We just found out today that buyer is switching from a conventional loan to an FHA loan. Probably why they were dragging their feet on getting an appraisal done. What can I do to protect myself? I feel like this is about to go south quickly. Yeah i don't know why i didn't see this either, but seems like @skywindO2 should be correct. I'd at least try to get your realtor to get the story behind their loan issues. If they have nothing to hide, you should get a convincing story to stick around. If they're dodgy about it, then big red flag. But honestly, if you're already in the contract and your house is off the market, i'd see if it goes through. Whether it hits the market again today or two weeks from now won't impact your next deal in any significant way. May as well see if this will pass through. 1 Quote Link to comment Share on other sites More sharing options...
theJ Posted June 13, 2019 Share Posted June 13, 2019 Buyers better go through with the sale after inspection. They tore up the yard something awful during the septic inspection today. I'm not fixing that ish. 1 Quote Link to comment Share on other sites More sharing options...
skywlker32 Posted June 14, 2019 Share Posted June 14, 2019 17 hours ago, theJ said: Buyers better go through with the sale after inspection. They tore up the yard something awful during the septic inspection today. I'm not fixing that ish. I feel like there's gotta be some way to seek compensation if they don't go through with the sale. Quote Link to comment Share on other sites More sharing options...
Malfatron Posted June 14, 2019 Share Posted June 14, 2019 9 minutes ago, skywlker32 said: I feel like there's gotta be some way to seek compensation if they don't go through with the sale. Earnest money though right? 1 Quote Link to comment Share on other sites More sharing options...
theJ Posted June 14, 2019 Share Posted June 14, 2019 40 minutes ago, Malfatron said: 50 minutes ago, skywlker32 said: I feel like there's gotta be some way to seek compensation if they don't go through with the sale. Earnest money though right? Maybe. I tried asking my realtor about it last night, but i don't think he really understood my frustration. To him, it had to happen to see the septic tank. But there's a reason you don't go around knocking holes in the walls to see the wiring - you only inspect the things you can see. So i was a little baffled by it. I dropped it for now. If they don't go through with it, i'll bring it up again. For now i'm just hoping they go through with it so they can deal with the consequences of that action. At least we already moved, so i don't need to live around it for the next month. Quote Link to comment Share on other sites More sharing options...
skywlker32 Posted June 14, 2019 Share Posted June 14, 2019 25 minutes ago, theJ said: Maybe. I tried asking my realtor about it last night, but i don't think he really understood my frustration. To him, it had to happen to see the septic tank. But there's a reason you don't go around knocking holes in the walls to see the wiring - you only inspect the things you can see. So i was a little baffled by it. I dropped it for now. If they don't go through with it, i'll bring it up again. For now i'm just hoping they go through with it so they can deal with the consequences of that action. At least we already moved, so i don't need to live around it for the next month. 100% the right method. If the sale goes through, no issue. If it doesn't, then they just did damage to your property and should be financially responsible for it, as that would hurt the market of your house if not fixed. No need to make waves until it's an issue though. Quote Link to comment Share on other sites More sharing options...
N4L Posted June 14, 2019 Share Posted June 14, 2019 On 6/4/2019 at 11:26 AM, MikeT14 said: So we are selling our house. Buyer has been taking their sweet time with the inspection report and bringing in "specialists". The due diligence period ends Friday. We just found out today that buyer is switching from a conventional loan to an FHA loan. Probably why they were dragging their feet on getting an appraisal done. What can I do to protect myself? I feel like this is about to go south quickly. Friday deadline passed, what happened? Not sure how it works in your state, but in California (where I am located), if a buyer waives contingencies and then cant move forward with the sale, they typically have to give you their initial deposit for your troubles. I disagree with what everyone is saying that its an automatic 'red flag'. FHA loans are very attractive for home buyers. Its possible that they switched lenders to get a better rate and be able to put less down. It doesn't mean the deal is going to go sideways, just might take a few extra weeks. Depending on where you live, a few extra weeks shouldn't be a deal breaker. How much cash did they show (relative to the purchase price) you before you accepted their offer? Were they preapproved? If a conventional lender was willing to lend to them in a vacuum, then the FHA side of it should go fine because they are probably putting less down, and will therefore be more able to cover the difference in case the home doesn't appraise. If you didn't get a preapproval letter from a conventional lender prior to accepting their offer, then shame on your realtor and then the FHA news is now a big red flag in my eyes 19 hours ago, theJ said: Buyers better go through with the sale after inspection. They tore up the yard something awful during the septic inspection today. I'm not fixing that ish. Not sure how it is in Ohio, but California has very specific laws about this. They aren't allowed to make any changes to your property without your explicit written consent. They couldn't drill test holes looking for termites without your consent, for example. How long do they have before they have to waive contingencies? I would say something to them now. You don't wan them to think they didn't do anything wrong, then if they decide not to move forward and you get upset, it will seem like you are angry that they didn't buy the home. Give them something in writing stating that you did not authorize them to damage your yard so that it is documented in case you need to take them to small claims court down the road. Take pictures etc as well. Make it clear when you send this to them that you are hoping that they move forward and that you want them to buy the home. That way they know you want to make this deal with them, but that you aren't exactly thrilled at the idea your yard has been damaged 1 Quote Link to comment Share on other sites More sharing options...
MikeT14 Posted June 14, 2019 Share Posted June 14, 2019 56 minutes ago, N4L said: Friday deadline passed, what happened? Quote We're in the Earnest Money period. Appraisal went fine. I think we're on track to close, but they still have not been cleared to close. How much cash did they show (relative to the purchase price) you before you accepted their offer? Were they preapproved? If a conventional lender was willing to lend to them in a vacuum, then the FHA side of it should go fine because they are probably putting less down, and will therefore be more able to cover the difference in case the home doesn't appraise. Quote They were pre-qualified, not pre-approved. 10% down was what they listed. We went with the risk on this offer because it was $3500 more cash. Quote Link to comment Share on other sites More sharing options...
theJ Posted June 17, 2019 Share Posted June 17, 2019 On 6/14/2019 at 1:56 PM, N4L said: I would say something to them now. You don't wan them to think they didn't do anything wrong, then if they decide not to move forward and you get upset, it will seem like you are angry that they didn't buy the home. Give them something in writing stating that you did not authorize them to damage your yard so that it is documented in case you need to take them to small claims court down the road. Take pictures etc as well. Make it clear when you send this to them that you are hoping that they move forward and that you want them to buy the home. That way they know you want to make this deal with them, but that you aren't exactly thrilled at the idea your yard has been damaged I wouldn't go to small claims court over this. I'd spend more time there than just cleaning it up. They don't know i've seen the damage yet. We don't live there anymore. Their inspection period ends this Wednesday. Should have everything settled by Thursday, at which point this will become an issue, or not. 1 Quote Link to comment Share on other sites More sharing options...
theJ Posted June 19, 2019 Share Posted June 19, 2019 On 6/17/2019 at 6:49 AM, theJ said: I wouldn't go to small claims court over this. I'd spend more time there than just cleaning it up. They don't know i've seen the damage yet. We don't live there anymore. Their inspection period ends this Wednesday. Should have everything settled by Thursday, at which point this will become an issue, or not. Seller didn't ask for much in inspection (septic tank pumpout). It'll amount to about $200, and zero labor from me. And it sounds like their loan is flying through, so we're close to being in the clear here. 2 Quote Link to comment Share on other sites More sharing options...
navysaintsfan Posted June 19, 2019 Share Posted June 19, 2019 On 5/15/2019 at 7:36 AM, navysaintsfan said: Just got word Monday that the seller accepted my offer We close July 2nd! This is my first home! .25 acre lot, huge backyard, 1588 sq ft 3 bed/2 bath split level, nice size rec room, beautiful kitchen with granite countertops and new stainless steel appliances, in a good part of town! $205,000 (VA loan) with seller paying $7500 towards closing costs! So excited! Been trying to get a house for about a decade now (I'll be 36 at time of closing). House was appraised at $215,000! We are walking in with $10k in equity Inspection went great, pest report was clean, and my file should be coming out of underwriting hopefully by the end of the week! Closing day is getting closer and closer! I can almost taste the sweat of me having to mow that yard! 5 Quote Link to comment Share on other sites More sharing options...
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