April 2nd, 2009 | categories: Coconut Grove Real Estate
I got an interesting question today on The Coconut regarding foreclosures. The question was “how long is the seasoning period for reselling a foreclosure.” In other words, after you purchase a foreclosure is there a restriction on when you can re-sell it?
When I read this question I wondered if it was an indication that investors were re-entering the market. Only time will tell, but I must say that getting this question was very refreshing.
Flippers are you out there?
After talking to JamesVenney (private mortgage banker and author of Juicy Estates) I found out that there is no restriction on when you can resell a foreclosure after purchasing it. If the new buyer is a cash buyer, you can sell it the next day. If the new buyer is not a cash buyer, you may run into a problem with the new buyer’s lender. FHA guidelines require an owner to have the title at least 90 days before they will finance a new purchase of a foreclosure.
As with any quick re-sell, there may be ramifications with your lender if you have pruchased a loan that has a prepayment penalty.
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