BrokerageIndustry News

Private financing, rate buy-downs can rescue sale

Part 2 of 2: How to close deal when lender says 'no'
Published on Sep 4, 2007

(Read Part 1, "Low appraisals kill sales in today's market.") A slowing real estate market, a credit crunch and an increase in foreclosures means that mortgages may be harder to obtain. What can you do when the lender turns down your qualified borrower? Last week's article looked at how to handle a situation where the appraisal comes in low on a property. This week we look at additional strategies to assist you in closing a transaction when the lender says "no." Second and Third Mortgages Bridge the Gap If the appraisal comes in low and the buyer still wants the property, one option is for the buyer to seek secondary financing. This could involve having the sellers and/or the agents carrying a second or third mortgage. Another alternative is to seek a home equity line from a credit union or business bank. For example, if the buyers planned to make any renovations or to replace major items such as the air conditioning, carpets or appliances after the closing of the transaction, they may...

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