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Monday, November 10, 2008

Daily Observations - Sure Way To Kill a Deal

Tonight I want to share what I thought was common sense, but to my dismay may not be understood by the mortgage community, and certainly is not understood or acknowedged by your clients.

It is a DEAL KILLER if a property that you are trying to get financed is listed in any MLS, or if not in an MLS as a FSBO. If the appraiser goes out to the property and sees a For Sale Sign, your client will get billed for a worthless appraisal as the lender will not move forward. This is not a policy question where may be we could get an override, this is a fact!

No lender is going to lend you money for any refinancing, business expansion, working capital etc, if they know you are trying to sell the building and or the business. Saying that if you are trying to sell the business opportunity only, and the seller is going to keep the real estate you may be able to get around this, providing there has been historical cash flows, etc. to meet the required debt service coverage ratio as well as appropriate net operating income for the loan requirement.

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