Will "C" Buyer be able to CLOSE?

We all know by now that buyer funding sources can be an irksome challenge to overcome. Finding an end buyer or in this case a "C" buyer is not like a normal real estate deal where if the buyer is "Qualified" then it's pretty much a slam dunk.

As back-to-back closers we have to qualify the buyer and their lender, and sometimes maybe even their Real Estate Agent.... One of my deals fell apart because we did not qualify the lender, I thought the real estate agent I was working with was doing that, but as it turns out he either did not know what to look for, or just completely forgot. 

As it turned out the loan was FHA and of course the lender was no happy to hear he wouldn't be doing any business on this property after having the buyer pre-qualified for about 4 months.

The buyer was given the chance to work with one of our conventional lenders that could have qualified them no problem, but the agent representing the buyer kept dragging her feet, and evidently did not approach them with it. Her agencies attorney told her she could not represent this type of deal anyway. I am sure if I had the time and patience I could have sat down and explained to the attorney how it works, and possibly get his blessing. He just did not understand it, so he told the agent not to be involved. What a mess!

So from now on I immediately look at all offers that come in to determine what kind of loan it is. It should say right on the offer who the lender is and what kind of a loan.

If it is what appears to be a COMPATIBLE loan which typically must be conventional, and everything else checks out ok IE the offer is high enough, not too many contingencies, etc...Then I make the call.

After introducing myself and letting them know I am working on such and such property. I tell them I have been doing the negotiating with the lender to get the payoff...

I then ask like this: Does this loan have any seasoning guidelines? They will usually come back with a confused answer, not really sure what or why I am asking. I go on to explain; in the process of getting a payoff for these short sales we often will use a "Negotiating Buyer," and SOMETIMES this Negotiating Buyer will also be used to close the deal, therefore the property would be transferred from this Negotiating buyer to the buyer that is getting the loan through you. Then I shut up and let them talk. You would be surprised at how many lenders will come back with "Oh so the buyer would be buying it from an investor, correct?" Most lenders know what a double close, or in their world a "Flip" is, but only some will be ok with it. SO, then if they say no problem then I follow up with wanting them to check into it for me just to be sure..... 

But what if they say No Way we have seasoning issues here. Notice the word SOMETIMES in my conversation above is in CAPS! They may or may not catch this when you are talking to them, but it is framed this way to keep it your mind that you not trying to corner this lender into doing something they cannot, or will not do. For me it really is just a less stressful way of breaking the news to them.....

 

So getting back to the objection. First off, if this is the only buyer you think will work, and if you are down to the wire and don't want to take a chance with having the buyer use another lender, then you can tell this lender that "Well it sounds like you have seasoning requirements that just won't allow my Negotiating Buyer to close this deal, no problem we can set it up to close with the owner of record, i'll be in touch, thanks have a nice day".

You can also touch base with the buyer's agent in sort of the same way. Although there really are Not as many real estate agencies as lenders that would object to a back-to-back. Sometimes I just do not even say anything, and it seems to go fine. In any case it is something to also keep in mind.

Until we have proven solutions to the seasoning issues, it will require more tact then the average deal to get em' closed.