The Listing / Refinance Approach

Published by julia | Filed under Buyer / Seller Tips, Listings, Miscellaneous, Real Estate

Refinancing is applying and starting over a new loan. The old loan is paid off by the new loan hence the borrower makes the payments depending on the terms for the new loan. It is not advisable for investors to list the property for sale and then try to refinance it. This is because the property will not bring in the profit as expected. However, if the property did not sell and it was on the MSL listing, it makes lenders not to give money to the borrowers. This is because they get doubtful about the property unless there is evidence on why it did not sell.

An MLS system can be easily accessed and checked by the appraisers making it easy to know whether the property has ever been listed. The MSL system normally makes sales for most of the properties. This is because it is gives a clear indication of a factual market value. Therefore, if the property takes longer than expected in the market, then it may be due to the value given to the property. This shows that if the property is assumed to be worth a certain amount of money and then it fails to sell for the same price at a given period of time, then it taken that it is not worth the amount. Therefore, it becomes impossible to refinance it because it will give back less money than expected.

Before purchasing any property, it is good to have a proper ‘exit’ strategy in case a problem occurs. For instance, if the exit chosen is bridge financing, then it should be kept as rental. This is because at some point the used debts need to be refinanced for one to obtain the property.  If the fixer is bought then its value increases, then it is possible for one to acquire loan based on the new value appraisal of the property.

However, if a property is listed on MLS system at a certain amount of money like $100,000 for quite some time, then it fails to sell for that price. It is possible that one will get the appraisal $80,000 or even less. This means that one can borrow 80% of the appraisal of which the expense made will be less. The problem is magnified further if the price for the property keeps on dropping often. This means that when it will be taken off the market to be refinanced and one is expecting appraisal for the original price it will not be possible. Therefore, it is wise not to show the value of the property if one is intending to refinance it. The values opinions are the appraisals and people who assess those appraisals concentrate on real markets that are profitable for them to determine whether they can lend money.