We just can’t seem to get that 13th house purchased…as of today, we’ve backed out of purchase of The Skyline House…
I really hate backing out of deals, but there were three reasons we backed out of this one:
- The title company was having issues getting clear title to the property. We were supposed to close on Tuesday of next week, and when they realized that they couldn’t close on Tuesday, they sent us an extension for TWO WEEKS. Experience has taught us that if they feel the need to extend closing by two weeks for title issues, it very possibly going to be much longer than two weeks;
- The seller (Fannie Mae) has a rule where on all their REO properties, they put a restriction on the deed that keeps us from reselling the house for 90 days from the date we purchase it. While we’ve gotten used to not being able to sell to FHA buyers for 90 days, this restriction would mean we can’t sell to anyone for at least 90 days. We’ve run across this issue on a few prior properties, and every time we’ve requested that the seller remove that restriction, they’ve done it for us. This time they said no, and wouldn’t budge. This would make it very difficult to sell this property before February or March given the closing delays, the 90 day restriction and the end-of-year holidays;
- Lastly, we did a more formal scope of work and budget, and realized that not only was this going to be a big rehab, but we’d barely make an average profit on this deal. Given the two issues above, it’s just not worth a lot of work and a relatively small amount of money. Had the profit potential been bigger, or had the seller been more reasonable, we would have happily waited for the title issues to get resolved; but given the overall situation, we’ve decided to go find a better deal…there are plenty out there.