" Un-mortgageable house...
 

My dh and I put an offer on a great home . We could not make an offer unless we prequalified , which we did. The sellers realtor then asked if we could pay any other way because the home was unmortgageable. :grit: Our offer has not been accepted yet but I wonder what the problem is.

Has anyone come across this type of thing? My guess is that the house could not be issued a certificate of occupancy. I am guessing the previous owner did quite a bit of work but did not pull the necessary permits.

We will of course have the home inspected, but that is tricky also because the electricity is not on and the plumbing has been winterized.

Any ideas? Suggestions?

What is the value of the land? In my case I had a heck of a time getting financing for my house because it was looked at as unlivable by the bank. I also had a less than stellar work history which made the bank baulk even more. I had a third of the total sum to put down and the payments were 200 bucks a month and the bank kept whining about how they weren't sure if they could get out 20 grand out of a 5 acre lot with a good well and septic (most 5 acre lots are 30k on up with nothing on it). Finally I got a loan for the value of the land and my parents had to be put on as co-owners due to my job history. The mortgage rate is a lot higher than a normal home mortgage. If the land is worth the asking price I would see about getting a different type of loan. If the land isn't worth what you are paying then your SOL as far as getting money out of the bank :(

Maybe it is different from state to state but here it means that the house is ready to fall down.

A land contract, perhaps?

As Elmer Fudd says,.......be werry, werry careful......... My first question to the Realtor would be, what the heck does that mean???? A seller is required by law to disclose ANYTHING that could be considered a defect that he, or she is aware of. The Realtor is also on the hook for any knowledge of a defect that they are aware of. Both the seller and the Realtor KNOW that there is an issue SO large that the house is un-financeable and he asks you if you could find another way to pay? in a manner that is as casual as asking if you mind that one of the bedrooms is painted pink? Sorry, but this one really spikes the caution meter. If the bank refuses to buy it for you (which is really what a mortgage is all about) I can't imagine why you would want to?

Actually the house has very little land with it.....but it is very close to the land that we already have.
The house appears to be in good shape. It is an old huge brick home. The flat roof seems good, it has three new electrical boxes. ( It is a three family, one large apartment on the first floor and two one bedroom apartments upstairs) All the bathrooms seem new but all the kitchens need some work. No obvious water problems.... I just can't figure it out.
Terri what is a land contract?
Thanks all!

I do know the house is a foreclosure.
We want to buy it because it would be great to be closer to our land and renting the other apartments would pay the mortgage. It is the type of home I have always dreamed of living in.

Bank repossessed the place down the road which has two homes on it, but one of the two was built without permits and the Realtor told me it was an illegal structure so they could not sell it as a home, only a shed or outbuilding.

There was discussion recently that foreclosed homes could not qualify for title insurance and the possibility of the previous owner being evicted unlawfully could come back to haunt the next owner. Banks are comfortable with cheating someone but balk at defrauding the next victim (especially when they might lose).

A clean title was a condition of the sale

If you want to see the house search Cornerstone Properties Cherry Valley NY. Under residential it is the brick multi family listed for 42,900.

wow, what a pretty place. The thing about old brick is they are not a good investment in NY. It says 1930. When the ground shifts from freeze/thaw, winter/ summer The bricks dont give, liek a wood frame dwelling. They are a lot of upkeep. I couldnt say for sure what the deal is, but I bet the bricks need lots of repair. Bricks and NY dont go good together. But what a beautiful house. I like the home just below that one village cantahorhe.

Bring a friend to look at it who knows a lot about brick homes and can give a pre-inspection. I am sure the realtor knows why it's unmortgagable. I know someone who got a mortgage for a home like this. He had to fix the bad things before they gave him that mortgage. Windows changed, all chipping paint etc. IMO He got robbed. NY banks are hard on home inspections. They are very particular. I just sold my home this year, what a nightmare. let us know what you find out..

I am concerned about the brick on the north side of the house but I have to say it doesn't look bad to me.
Of course I am not an inspector.
It is hard not to let my emotions get the best of me ( I have already decorated it in my mind ) but fortunately my dh is more level headed about this deal.

DH and I once put a bid on a house I wanted very, very badly, in the same little community where my family lives. If I hadn't been with him when the inspector went through it, it would have been very hard for him to talk me out of buying it. But, alas, the builder had not bothered to do anything up to code. Finally, the inspector said, I just don't know what you'll have here in ten years. We walked away from that one very sadly. I'd already told my parents we were buying the place.

I'd ask the realtor for an explanation, and if I still wanted it, I'd get a home inspection before going further.

I had this issue come up with a property I wanted to buy that had two houses on it. I suspect the fact that it has been divided is the issue.

It was a "non-conforming use" and would never be treated as a plain old residence for mortgage purposes. I could have gotten it as I had about half the money down, but I decided not to go forward because I figured it would be a pain to sell later.

Jena

Love the place! Hope you can figure something out. :)

I would NOT buy it without MUCH more info.

You must get the reasons from the seller's realtor.

Looks like a nice home -let us know what you find out - do you know an inspector? A construction buddy that you trust?

Wow! Taxes are huge in that area!

I don't think foreclosure has anything to do with it. We bought a foreclosed house from Fannie Mae earlier this year and title search and title insurance was not a problem. That was a cash deal, but the realtor asked if we wanted to finance it. Make them tell you exactly why they won't loan on it. It's either been deemed structurally unsound, or the apartments were added without permits or something. It must be really tough to walk away if you like it and it's near your land. But that's a huge red flag and best to get to the bottom of it now.

Another condition of the contract was to pass inspection along with legal review so we are protected. It will be very interesting to find out what the problem is.

If it is because work was done without a permit how could that be resolved?

I just bought a foreclosure; no problem with the title policy and I did get it financed easily. It should be up to the LENDER to decide if something is "unmortgageable" or not....it's THEIR money....

If woke was done wothout permits, then permits would need to be filed and inspectionsa done by the County inspectors. If that requires pulling drywall off to see the plumbing or wiring or insulation, then that's what will need to be done.

I am afraid for a person entering into a three unit apartment purchase that thinks the rent will pay the morgage. In my experience, rent hardly paid the taxes, insurance or upkeep. That was with me being able to all the work, plumbing, electrical, etc. myself.

IMHO, Realestate people are crooked. For someone to be entering into what sounds as a shady deal, at least something that seems odd, that doesn't know what a land contract is scares me.

Keep us informed and we'll try to help you avoid pitfalls.

Goodness, all this is mind boggling.

Please let us know what exactly that means.

may mean "in a conventional mortgage" sence
 

I just had my property in central NY appraised, so I can sell it.
The appraiser explained to me, that due to condition of the interior of the
house, though quite livable by most people's standards, would probably be very difficult to get a conventional mortgage on, without a large down payment, due to amount of sprucing up it needs.Also, banks now look at property with a significant amount of acreage different also. This has all come about with the new banking rules. Could be a similar situation, just throwing it out there.

Did you put earnest money with your offer, or can you withdraw? If possible, I would withdraw until I found out just what is going on. I would suspect it is because you will be trying to finance a rental property with a single family mortgage. Most lenders will not do that--meaning it will have to be appraised and reclassified--and be rezoned. It may mean that the former owner/s converted it into a multi family rental without the proper permits, inspections, and zoning--an underground operation that only you can buy if you stay underground, too--with non-conventional financing. I would also be suspect about getting any kind of normal homeowner's insurance for it, as well.

My own opinion.

geo

That's what I thought, too!

Total Taxes: $ 3,300.00 +/-???

At that price, you're probably paying more for taxes each month than the mortgage!

Write in the contract that the current owner must turn on power and allow usage of all plumbing for inspection.

I did that very thing on a house I was looking at that the power had been turned off. Seller refused and I walked. WHich is what any buyer should do unless you are getting it so cheaply that you can replace all the wiring and plumbing if necessary.

My guess is that a mortgage isn't available is because it lacks a working furnace and plumbing.

How are you going to heat that thing, BTW? More than one furnace? That could get pricey very quickly.

One note is that the roof said "Rolled or composition". This tells me someone went cheap on the roof at one time. (What else did they go cheap on?)

I just looked at the 'more pictures".

Wow. Looks like someone went to a ton of work to make a few of those rooms very nice.

What is the story on the place?

It said that it was built in the 1930's, but it looks like a dead ringer for an Italianate to me, which would date it much, much earlier. The fireplaces look of the Italianate era, as do the tall, narrow windows.

I'd guess, just looking at 10 little pictures of a house on the internet 600 miles away from where it actually stands, that the place was originally built in the 1870's, plus or minus.

That would be an AWESOME house to own and restore.

Gorgeous place but I'm with the rest. Full inspection and require full disclosure of WHY they are saying it is unmortgageable and what made them list it as it is listed.

I'm betting the house was converted to apartments without the proper permits. If you check with the county department that issues permits you could find out.

The "Fair condition - as is" in the listing is a huge red flag. SOMETHING'S wrong; just gotta find out what it is and whether it's worth fixing!

Talk to the realtor. There is no need for all of the guessing games. He has to disclose what he meant.

We purchased our foreclosed farm last year for less than half the value because it was unmortgageable. We paid cash. We put our low ball offer in and waited four months for them to accept it. We knew we had them over a barrel. Five other offers came in at price or above, but not a single bank would approve it. They eventually came back to us. Title insurance was not a problem either.

The place was unmortgageable for two reasons. 1. There was no permanent occupancy permit. There was an issue with the well since the house was built that had never been dealt with. The neighbor, who had been the previous owner, was claiming the well was on her property. 2. There are two addresses on the books for this property. The original address off the main road (which we have road frontage), but the previous owner put in a private road with a new address. They never reconciled the problem and mortgage companies didn't want to deal with it.

Neither of these concerned us. I looked over previous surveys, took out my tape measure, and was 90% certain that the well was ours. A survey proved me correct and the problem was corrected with the county for no additional fees.

Since the realtor did not disclose the information prior to a contract, you may be able to use this as leverage to lower the price. Just do your research and see how much it is going to cost you to correct any problems and if your bank will work with you. Good luck!

Sarah

I just looked at the pics. For $42K whatever the condition, that is one great price. As long as it is structurally sound, if I wanted a house in that area, I'd buy it in a heartbeat. Do you belong to a credit union? They are usually a bit more lenient than regular banks. By all means, continue to investigate, and especially get an inspection. Around here, if a seller won't have the utilities turned on, you can do it yourself for inspection purposes for a small fee.

I bought a foreclosure about 10 years ago that had froze out in the winter. The inspector couldn't get any water to work at the faucets or toilets because of burst pipes, so it was unmortgageable. The bank allowed me to go in and make the repairs to get the water working so I could get the loan.

A house under $50,000 with $3,000+ property tax? Ouch. I love NE but that's a killer.

In my area there are several reasons. First, the mortgage company needs to have it listed as good condition not fair, second it needs to appraise for the mortgage amount, 3rd all inspections must pass, sometimes that is an issue with older septics that won't pass by todays standards although they work fine. In all cases there are possibilities of getting the mortgage anyway. With good enough credit, enough down, or a loan with funds for repairs built in, I found it quite easy a few years ago, though things are supposed to be different now. Talk to the realtor, find out why, then talk to your mortgage co. If you can get around the issues it usually means you will get a great deal because it is harder to do.

Ouch is right. I thought property taxes were high around here. My house had some ridiculous amount that it was valued at. I got my taxes cut in half by telling the assessor that I paid half of what the taxable value of my house. I have a feeling the brick house is way over-valued by the township/county.

The taxes in NY are fairly high compared to many other places in the US. However, the purchase prices of properties in our rural areas are quite low.

As far as the circumstances that cause this property to be not be eligible for a mortgage, there are several possibilities once the reasons are known:

If the issue is a furnace or other infrastructure, then that can become a condition of the sale and worked into a contract as an obligation of the seller.

If the issue is an illegal conversion to a 3 family, then a zoning variance can probably be obtained retroactively after the proper inspections have been completed. Never buy before the variance is obtained! The current owner/bank can go before the zoning board and explain the circumstances and the fact that a sale hinges on the outcome of the vote.

Also, check the tax assessment rolls... If the house is not mortgagable, then the actual assessment (the amount you would be taxed on) is probably NOT right and should be adjusted accordingly. Sometimes the properties are not re-assessed for years.

NY & NJ are super high in property taxes. A large reason in NJ is the schools. NJ has 21 counties and a handful of large municipal areas and in a normal world would have 25 - 30 school districts.

Instead the 590+ towns have 600+ school districts...Yup sending districts still have an administrative structure w/ a school supervisor making $150K to $190K and a support staff of high paid assistants...

Instead of 21 county purchasing agents 600+ individual purchasing agents that have to buy books & supplies from approved vendors at large markups...

Then the state took over the poorest urban districts and formulated a school construction money 'hole' that spent a few Billion to build a couple schools...including one in Trenton on contaminated soil. That one was almost finished whenthe dirty dirt was discovered so they had to demolish a brand new school building...

And the sheeple keep re-electing the same crooks...Google 'pay to play'. Politicians doing this in other states end up in the grey bar hotel...