My office has been getting a lot of success from using our preferredprogram. Sellers, Buyers and Real Estate agents love it. We all seen seller concession limits and borrowers getting frustrated because of lack of down payment, this is why I love this program because this exceeds the normal 3-6% seller concession and is wired within the hour directly to the settlement office. Did I mention they give us Lenders and Realtors FREE marketing materials like yard signs, brochures, and custom mailers.
What this program is all about:
The Genesis Foundation, Inc. a non-profit organization is providing assistance under there “The Preferred DownPayment Assistance Program” (hereinafter call GIFT). The assistance is in the form of a “gift” (it is not a loan and is not secured by the property) and no repayment is expected or implied. The Genesis Foundation, Inc. (hereinafter-called Authority) administers the program.
The Seller agrees to then contribute upon closing an amount equal to the Gift plus the low $300 processing fee to The Genesis Foundation.
FHA only allows family members or a 501c3 non-profit organization to provide downpayment funds for the Buyer.
The maximum Gift is $25,000 and IS NOT tied to a percentage of the sales price. My company can actually go up to $40,000 for a GIFT!!! This is huge!
Stats:
Nationwide, most homes after negotiations sell for 5-7% less than the asking price. This is the APOR (Annual Percentage of Reduction). For example, if a house is listed at $100,000, the seller usually accepts a bid for their home ranging from $93-$95,000.
In a PreferredProgram transaction, the seller does not need to negotiate. Instead, offer the home for the full appraised value and include a 3% downpayment. Using this strategy, the seller has the potential to net more than what they would have received when negotiating with a buyer.
Since the lack of a Downpayment is no longer an obstacle, there is an increased pool of buyers and thus there is the potential to sell the home much faster.
How It Works:
Purchase price $200,000
Down payment and closing costs: $10,000
Realtor writes offer for $200,000 and asks seller to donate $10,000 to Genesis preferred program
Two additional documents necessary to submit with offer
Seller or Buyer can pay the Genesis fee
Perfect for:
Listings sitting on market for awhile
Borrowers that do not have eligible credit score for 100% financing
Foreclosures, 203k, houses that need work
- Less Marketing Costs when the home sells for full appraised value.
- Higher Commissions and spend less time playing tour guide
- Potential to Sell at Listed and/or Appraised Value.
- No Stipulations - Buyer qualifies for loan allowing Downpayment Assistance, Seller agrees, we will gift the funds. (Not based on credit scores, No soft 2nd..etc…etc)
- FREE marketing materials for REALTORS!!!
So check out the website and start bugging your lender for this down payment assistance program and if you are on the east coast look me up and let me show you how this can help our clients!! :)
http://www.preferredprogram.org
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