Emergency Down Payment Source

By
Real Estate Agent with Signature Executive Realtors - Serving Maryland and Virginia

After finally getting an approved short sale, now we have found out that the area the house is located has been labeled a "declining market" and the buyers now need not 5% down but 10%.  They have the 5% and have no other seasoned sources. 

Any ideas where to get the additional 5%?

Need answers fast!!!!!!

We have to close by 3/10/08!!!

 

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Rainmaker
430,598
Adam Brett
The Adam and Eric Team - Fullerton, CA
The Adam and Eric Team, Setting the New Standard

Looks like you may be out of luck.  I have seen this happen and a lot of deals go sour because of it.

You might look at the sales price and the appraisal.  There might be some room there. 

Mar 01, 2008 12:00 PM #1
Ambassador
791,084
Charlie Ragonesi
AllMountainRealty.com - Big Canoe, GA
Homes - Big Canoe, Jasper, North Georgia Pros
This is a recurring and new growing probelm I am waiting to see the answers I get
Mar 01, 2008 12:04 PM #2
Rainmaker
66,035
Jeanmarie McSpedon
RE/MAX At Barnegat Bay - Barnegat, NJ

Hi Vangie: Do the buyers have a 401K? I know you can tap into it if this is your first home. 

Mar 01, 2008 12:12 PM #3
Rainmaker
117,158
Keji Ogunleye
Fairfax Realty, Inc - Greenbelt, MD
GRI, SFR, KejiYour Realtor

What about the gift program- does the lender allow this- check out Ameridream or Nehemiah program.

Mar 01, 2008 12:20 PM #4
Rainer
19,064
Vangie Williams
Signature Executive Realtors - Serving Maryland and Virginia - King George, VA
Real Estate with Personality

The buyers have hit their 401K and Thrift Savings Plans, and because this is a Jumbo loan, Ameridream and the likes are out.

Isn't this declining market category sort of like REDLINING.

Mar 01, 2008 12:51 PM #5
Rainmaker
959,539
Kathy Clulow
RE/MAX All-Stars Realty Inc. Brokerage - Uxbridge, ON
Trusted For Experience - Respected For Results
Vangie -I don't know all your details or regulations but on occasion I have seen the agents provide secondary financing from the commission earned on the deal. My webguy/hubby/former broker did this several years ago and then rolled the mortgage into his retirement savings plan and got a tax deduction.
Mar 10, 2008 10:25 AM #6
Rainmaker
351,511
Dan Brudnok
Keller Williams RE- Exton - PA License Number #RS225179L - Downingtown, PA
REALTOR,e-PRO,ABR,GREEN,SRES,CSP

Vangie,

I see you have gotten what I could contribute.....I hope it happens for you.

Mar 10, 2008 10:50 AM #7
Rainer
39,087
Serena Brown
Taylor-Brown Real Estate - Hammond, IN
Does the town that the property in have a down payment assistance program?  Call the Empowerment Zone for the town or City Hall and ask about downpayment assistance program.  Also the person may be able to get a gift.  Will the bank approve 3% of the money need as part of the deal and buyer get the rest as a gift?  How much will the person receive in tax credits?  Do they have a 401K or IRA with the necessary funds in it?
Mar 11, 2008 06:57 AM #8
Rainmaker
40,423
Diana Turnbloom
Escrowcoord.com - Martinez, CA
The Leading Expert in TC Services & Education

Vangie-Hope you were able to come up with a plan B. I've seen this happen out here. It's a fine balancing act. You don't want to pay for the appraisal until you have short sale approval. But by the time you get approval from the bank(s) you're almost at the end of the escrow! Then what, try to go back to the banks and ask them to reduce the loan amount again? HA! The other problem you have to look at-Is the buyer still paying too much for the property? Depends, if this is their dream home and they plan on staying 10 plus years in order for market values to pick up, then maybe yes! But if they are planning on selling in the next 2 years (for any reason-job transfer, illness, etc.) they may not be able to re-coup their down payment! "Welcome to My World!" Diana

Mar 12, 2008 11:49 AM #9
Rainmaker
1,256,009
Elizabeth Weintraub Sacramento Real Estate Agent, Top 1% of Lyon Agents
Lyon Real Estate - Sacramento, CA
Put 40 years of experience to work for you

The answer is simple. Go FHA. Most real estate markets have increased the price limits for FHA. In fact, in Sacramento, where jumbo loans are anything above $417,000, FHA loans go to $580,000. You can thank me later.

elizabeth weintraub real estate agent Sacramento

Jun 03, 2008 09:16 PM #10
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Rainer
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Vangie Williams

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