We had a possible contract for a house in Spring Hill, Florida, but it was made aware to us from our lender that they had certain guidelines when a property was re-sold less than twelve months from the purchase. This is what we were told by our lender as far as their requirements: Underwriting will require and review the following*:
a) Title commitment, including Chain of Title for the previous 24 months. If chain of title does not include prior sales price information, additional documentation will be required to document such. (i.e. conveyance deed, tax records)
b) List from the seller of all improvements made to the property since acquisition (if any) and the cost for each. Paid invoices to legitimate sources may be required for major repair items (i.e. new roof, gut rehab, etc...)
c) Second FHA appraisal will be required from a National Appraisal Company if the resale price is 5% or greater than the lowest sales price of the property during the preceding 12 months. (The cost of the appraisal may not be charged to the borrower). The lower value will be used.
We questioned who is going to have to pay for a second appraisal, the buyer or seller? That is another negotiation.
Prices are great to buy now but investors have to be aware that they may have to hold them or be ready to pay out more money and have very good documentation.
