Here’s what they’ve done to see to it, you’ll never have a chance at doing this.

1) Restricted the Title Companies with full disclosure to all parties.
2) Title Companies now require Full Disclosure to the Buyer and the price the first buyer bought the property for.
3) Fannie Mae properties have verbiage which require the first buyer to hold onto the home for 90 days or face lawsuit.
4) FHA and Conventional Lenders require two appraisals for properties owned less than 60 days.

If you’re planning on placing a cash offer on a home, with the hopes of a double close, please take into consideration all possible scenarios that could take place. First and foremost, before placing a cash offer on a home, you should research who the seller is and if they ( lender/bank ) allow for a double close. Then, you’ll need to contact the title company they are going through and find out if they know how to handle a double escrow. Not all Title companies do.

If you manage to get that far, you’ll need to be prepared for the possibility of the second buyer finding out what price you bought the home for and what price you’re trying to sell it for.

Even if, you manage to get this far, you’ll still need to confirm the new lender will allow for such a transaction. Disclose, Disclose and disclose is the only way you can get through a double close without having major issues. Or worse, lose the earnest money you placed down. And with cash offers, most lenders want to see 10% down on Earnest Money.

I can assure you one thing in a lender owned property and that is most lender addendum’s have double close clauses in their contracts.

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Our legal department recently stated all owner agent homes must be in full disclosure. Meaning, full disclosure of an owner agent property must be shown on the MLS PLANO visible to all buyers and not under the “Realtor Remarks”. Also, the contract cannot be executed without first having the buyer’s understand the property is being sold by an owner agent. This can be easily avoided by an email to the buyer or something in writing having them acknowledge the home is being sold by an agent.
The main reason for this type of disclosure is to protect the buyer from an experienced seller in real estate. The seller has access to information the buyer doesn’t. For example, the agent can access MLS where the buyers cannot. Agents readily have access to tax records and history reports of the property where buyers do not.

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Escrow can be opened at any title company accept when the property is bank owned. Bank owned properties require the buyer to open escrow at a specified title company because of the volume being done by the lender. Most lenders will specify one title company to handle all their business to prevent fraud or liability in a sale. For example, a double close or double escrow that does not disclose buyer A’s purchase price could be grounds for buyer B to sue for nondisclosure. The title companies assigned to banks know this and are aware of other types of liabilities to the lender such as an assignee clause. Which allows the contract to be sold to another buyer for a price above what the bank agreed to sale the home. The title company the bank chooses are familiar with what is allowed under the banks terms which is why they do not prefer using other title companies.

When a bank forces a buyer to use their title company, the buyer has the right to request the lender to pay for all the title fee’s associated with the purchase. If the lender does not permit this, they could be found guilty of Anti Trust Laws.

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We recently had the mortgage lender, Southwest Mortgage Partners, offer our clients a hard money 2nd mortgage with only 3% down. This type of financing was once known as a nonconforming loan but has been unavailable for two years until now. We are finally in a position to assist borrowers with damaged credit scores and buyers that couldn’t qualify for regular Conventional/FHA financing.

This new program will allow buyers to purchase a home with 3% down, through hard money financing. The loan will be arranged as an 70/27. The first mortgage will be at a 70% ltv with rates averaging 10% interest only. The second mortgage will be a silent mortgage with no payments due until the home is refinanced or title is conveyed. For more information on this type of financing, please contact us. ( Down payment must be 3% or 5k which ever is greater. Funds must be seasoned for 2 months )

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AS IS properties can be purchased FHA or Conventional; however, most AS IS homes are in need of minor to major repair. Any repair work that will deem the property non-livable will not go through FHA financing. Conventional financing is the same way, but are more lenient when it comes to smaller to minor repair work. FHA has an appraiser go out to the property and inspect it along with the FHA inspector. If anyone of the two inspectors note any missing or damaged AC units, broken windows, damaged carpet or an empty pool, they’ll deem the property as non livable conditions. “Chipping paint would not be a nonlivable flag, although bare siding wood would be.
Also, any safety or health concerns would have to be corrected prior to closing. FHA also requires everything be up to code.” – Sandra Dean-Mahoskey. This is the basic problem with AS IS properties. If you purchase a property AS IS and works needs to be done to “qualify the home” there’s no way of asking the lender to repair the items. The only option is for the buyer to come out of pocket for the work prior to the loan closing. This puts the buyer at great risk. AS IS properties are usually fine if built after 1990. Any properties prior to 1990, may be too old and may have much repair work to bring the property up to par. IS Properties include mostly bank owned homes, but can be short sales if the owner is no longer living in the home or has interest in the home.

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With the amount of resale homes contracting it’s becoming harder to find an ideal type of property for prospective buyers. Most homes on the market need several thousand dollars worth of repairs to make the property livable. We recently showed about 5 homes priced around 180k in Gilbert. These homes needed work and seemed to be priced with the market but wasn’t worth putting an offer on when you could drive up the street and buy a new home with less hassles.

William Lyon Homes in Arizona

The hard part is finding a new build that doesn’t require a huge earnest money down to contract a home. Most new builds in Gilbert, AZ require at least 10-20k down to contract. That’s a lot of money out of pocket. Most first time buyers barely have 5k saved up which is usually the only down an FHA buyer would need. There is hope for new home buyers in Gilbert. We recently showed a new home builder in South Gilbert priced around 220k for a 2400 sqft home, brand new.

William Lyon Homes offer first time home buyers an ideal chance to get into a home with as little as 1k down for an earnest deposit. Compare that with new home builders up the street that want more than 10k for earnest. As of Saturday, this complex will have only one spec home left. Meaning if you’re a first time home buyer looking for a brand new home, you may have to wait 5 months until the next home is built. If you are interested in buying a new home, please feel free to call our office or send us an email. We’ll be happy to email you new builds in the area of your choice.

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