Birmingham Real Estate: You've Got Options: October 2012

Purchasing an investor flip and FHA anti flip rules

Over the years, I have yet to hear a single validadtion of why a second appraisal is required on flip properties.  I think it is a worthles practice that does nothing more than pretend that there is a real purpose behind the farce.  But as Beverly warns, both buying and selling agents must be vigilant determining the lenders requirements up front in or to prevent any surprises.

Over the years we have run in to a few cases with our buyers. We just had another situation arise with one of our listings in Culpeper, VA. 

Home was purchased in May by my investor, went on the market as a "flip", contract received with a Sept settlement date. We were passed the 90 days but under writing was requiring a second appraisal, because it was less than six months. When questioned and upon further review, all they needed was a desk top review(AVM) and not an entire appraisal. It appears we have to be on our toes with guidelines. Every bank is different in regards of hanging on to certain conditions.

The commom concensus we have found is "if a home has been sold within the past 12 months and the increase in sales price is 20% or more, it is the underwriter’s discretion as to whether or not a second appraisal is  needed." thanks Tom for the info

If you have a purchaser that is looking at home..

1. you should do your homework enough to know the history of the home

2. is it an investor flip?

3. what is the investors yield? 

4. talk to your purchasers lender before writing an offer on the property if is a flip

Upon the demand of the appraisal we researched the guidelines ourselves, here is the actual article on HUD.GOV FHA EXTENDS WAIVER OF ANTI-FLIPPING REGULATIONS THROUGH 2012

 

 

Origin of BDAMB from Bham (The Back Door Ambassador Series)

BDAMB Gains Access Through Front Door

Charita Cadenhead, Your Metropolitan Birmingham, Alabama Real Estate Broker of Choice

Got a question about Metropolitan Birmingham real estate? Just ask Charita. Need a good Realtor(R) to help you find a new home or sell the one you already own?  Just shoot me an email.  In need of a rental property?  Subscribe to be notified whenever we list a new or home for sale.

        
Charita H. Cadenhead, Realtor®
Keller Williams Realty Metro North
Gardendale, AL 35071
Search for properties at Charita Cadenhead's website
(205) 527-1112 - cell
(800) 496-7431 - Fax

One thing about being in real estate:  I can't hide even if I tried. Charita Cadenhead:  I'm Everywhere You Want to Be!

Follow Us on FacebookFollow Us on Google+Follow Us on TwitterFollow Us on LinkedInFollow Us on YouTubeFollow Us on RSS

Protected by Copyscape Plagiarism Finder

Comment balloon 3 commentsCharita Cadenhead • October 24 2012 04:16AM
Purchasing an investor flip and FHA anti flip rules
share
Over the years, I have yet to hear a single validadtion of why a second appraisal is required on flip properties. I think it is a worthles practice that does nothing more than pretend that there is a real purpose behind the farce. But as Beverly… more
The "Welcome" mat will be out, the coffee will be on, and I…
share
I don't know about you, but I think Gene, AR's all time favorite lender, deserves a very hearty congratlations on his latest move to American Portfolio Corporation. The "Welcome" mat will be out, the coffee will be on, … more