I have a CA deal and the t/b just backed out due to FHA.

With this deal the seller is a banker and the tenant/buyer is a VP at a branch bank so the qualifying on both sides of this deal has been interesting to say the least.

Things where set and the t/b back out, as her FHA contact at her bank said that the "Title" of the agreements did not meet the FHA guide lines. It should read "Rent with Option to Purchase." Although we use two agreements, I told the t/b that is what we have; she could always staple the two agreements together. Anyway, the other issue was that the agreements also needed to be between the t/b and the seller. And my response is that the agreements are once they are assigned. The t/b leases and buys the property directly from the seller. The t/b insisted the FHA guidelines stated that the agreement had to originate directly from the seller and the t/b and not be assigned from "me."

So, I notified the seller and with the seller being a banker too. She contacted her FHA folks upstairs. There reply was:

"I just spoke to my contact upstairs. I explained to her the issue of 2 separate agreements. She indicated FHA wouldn't care if there were 2 agreements, because once the option to purchase was exercised, the lease agreement is null and void. I told her I thought we were signing both agreements at the same time, would that make a difference? She said in her experience that has never been an issue with FHA. It is a lease agreement which is replaced at the end with an option to purchase. Again, the lease agreement is null."

So who knows?

This was just a great little deal. It is one of those properties that everyone is interested in and you can knock out in a couple of weeks. And what was great is that the tenant/buyer had FHA financing in place about ready to go. Damn. Well back to the marketing of this one. With all the attention with this property I want to get a larger assignment fee anyway.

Quoting Shakespeare in Henry The Sixth, "The first thing we do, let's kill all the lawyers."
That can readily be changed to read bankers.

That's the truth.

Steve, what the buyer is telling you is absolute BS. It is untrue. Unless the banker requires their FHA loans be underwritten in house first, and they have their own rule, it is BS.
If the buyer wants it, then great, draft a sales contract and it's done.
The buyer must not really want the house, and this is the excuse to back out.

Hey John! good to see on the board again.

I have been speaking with this t/b a couple of times this past week and the t/b even called the seller and now everything is a go. I figured the t/b just wanted out of the deal too. The only thing I can figure is this t/b was trying to interpret FHA guide lines into the L/Os agreements or something like that. Well, all is good and this deal should be done the middle of this week.

Keep Roll'n with your L/O business!

This is cool stuff! Just thought I would follow up with this deal from an email I received today. This seller (husband/wife) owns three houses, lives in one, the other two were vacant and they were stuck. It’s rewarding to help people and keep them off a potential foreclosure list.
…and any referrals from a banker ain’t bad either.

Seller:
Morning Steve, just wanted to drop you a quick line. The Langdon’s got moved in last week just fine. We made a few changes to the lease agreement because they wanted to do some additional things to the house. Kat (her husband) and I stopped by there last week to get it all signed, and the place looked incredible. We are both so tickled this has worked out for both our families. Thanks so much again.
Also, I wanted to give you a heads up. I have been referring you to every person that I come in contact with that has a similar situation. Hopefully one of them may work out to benefit you both.
Have a great day and Happy Valentines Day

Me:
Hi Nicole-
That is great! It is very rewarding to hear good news. I know Reed and Gloria really worked hard before moving-in to know what they needed to do to purchase the house. And they are good folks. Thank you for the referrals. Next year at this time we can look back and your house will be sold.

Thanks again! and take care.

Good work, Steve. Nothing like referrals as a marketing tool. Thanks for sharing.