why do these online bidding sites buy properties but only sale to cash buyers or conventional loans?

Asked by Mechelle Rabot, Vacaville, CA Tue Dec 11, 2012

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3
Walter 'Skip'…, Agent, Brea, CA
Wed Dec 12, 2012
The financing of a 'flipped' remains the challenge. When a property is marked up more that 20% in a short period of time, two appraisals are often required. In addition the seller will need to support with invoices the improvements made to support the price increase. Many of the investor/flippers do not want to provide this information. Therefore they want buyers with all cash or large down payments.
Good luck,
0 votes
Maria Gilda…, Agent, Manchester, CT
Tue Dec 11, 2012
Hi Mechelle,

The most likely reason is that the condition of the house may not pass the stricter requirements of other loans such as FHA loans or other government guaranteed loans, namely; USDA and VA.

Appraisal and inspection guidelines may be more rigid than conventional loans. Peeling paint, and presence of termites are just one of the items that may not pass the guidelines that is why sellers favor cash and conventional loans over government guaranteed loans.

I hope this helps.

Good Luck.
0 votes
Christine Fi…, Agent, Vacaville, CA
Tue Dec 11, 2012
Hi Mechelle,

I would be happy to answer your question, but can you tell me specifically what bidding sites you are inquiring about?

In general, most REO (Bank owned) properties typically accept the highest and best bid, which will result them the highest net. So, even though a cash or conventional loan offer could result in less time or effort on the Banks behalf, it is not necessarily their first choice.

I hope that helps, but if you would like to discuss it in further detail or need any assistance, please feel free to contact me.

Thank you.

Christine Fight
Hulsey & Associates
0 votes
Thank you Christine i went on hubzu placed a bid along with my pre qual letter my then realtor got the email that my offer was accepted i signed their contract sent copy of check earnest money for the site to turn around and say the buyer doesn't think the property will pass the FHA guidelines but they are willing to take cash or conventional loans then i email them saying look i know the property needs work but its nowhere near as bad as some of these HUD homes I've been seeing they then sent me a letter of rejection anybody can understand my frustration with them wasting my time going through all of turning in paperwork signing paper for them a week later to pull it is there anything i can do
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