Monday, August 26, 2013

Contingent On Sale - Learning More Details About It

By Justin Haines


I guess it did not struck me at first yesterday, I was conversing with a fellow friend, another Phoenix Loan Officer like myself and she was stating that she was doing work in her words a "contingency chain". I asked her to shed some light on this and she said this in a nutshell. Consumer "A" is investing in Consumer "B's" house but should market his home first, customer "B" is purchasing customer "C's" home but must close on the sale of his house to Client "A", buyer "C" is paying for client "D's" house but must close on the sale of his property to Client "B."

So if you're like me you will have to go back and re read this specific sentence a few times to completely understand it. In this situation my fellow loan officer buddy is doing the financial loans for most of these transactions, and she stated that this was the most reliable process of undertaking the contingent on sale type transactions. She could ensure that she can dig in and make sure there was not going to be any snags on the funding for ANY of the debtors, since if someone was to drop the ball on one of the loans the entire thing may probably break apart.

I am not completely very sure, but something should be going on in our market as I stepped back to my workplace to check our present dealings and we have 2 of identical style of transactions, not necessarily that several contingent on sale deals together but we've 2 separate clients who have decided "hey, we could make some cash on our house which we bought a couple years back, why don't you roll that into a fresh purchase". What an incredible idea right?

Here's where the option can get a little tricky.... It's ideal that you make sure WELL ahead of time which your phoenix loan officer is able to do with all of the possible concerns you can have. By having this conversation far ahead of time, you could ensure that you'll not end up homeless for several days. When the cash to close or the funds which it requires to close the brand new investment come from the sale of your own existing property you may come across a snag with your recent loan provider. I say you MAY for the reason that all loan providers are slightly different... Simply because that cash to close is not yet in your account you'll be smart to have your Phoenix Loan Officer check with their insurance underwriter on whether they would accept an expected HUD with a sales agreement of the house you are marketing and enable you to have docs to the title business on your new investment.

From here, it's perfect that you work with the same title corporation on the sale of your home and also the acquisition of the new property that way you do not worry about the wire from the sale taking a too long to get to another title corporation for your investment, that could create a serious mess. This is something your real estate agent must help you coordinate, if you don't have an effective broker to coordinate a negotiate communicate with me now and I could get you introduced to some top real estate agents who have a success rate with these types of transactions, your real estate group MATTERS.

Once again, contingent on sale deals require a bit more finesse, in case you think your loan officer has issues with yours I am here to assist you understand and coach them through it.




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