NEW Real Estate Question

I had to put up a G note on that first place, but got it back.

Bill, it might help you get better information if you put what kind of foreclosure property you're investigating in the subject line. Maybe then, though I doubt it, only people who have knowledge about Fannie Mae, Freddie Mac or HUD transactions will answer. If it's a bank owned property, I would walk--no run. Bunch of crooks IME.

One of them is reo/bank owned. Both have septic. One's taxes is under 200. The other's is over a thousand. A full bath is shower/tub, toliet and sink. A three quarter is a toliet, sink, and shower or tub. The 2 bath mobile is two mobiles squished togher. And allows horses. Both are on keller williams realty.

Here, only desperate Sellers accept Offers without Pre-Qualification or Pre-Approval Letters. All Agent Offers have multiple "Contingency Clauses." Standard ones are usually Title, Financing, Septic, Well, and Home Inspection. If you make an Offer, include Earnest Money, then:

Title must be approved or you walk & keep your Earnest Money
Financing must be approved for the Home, if not, you walk & keep your Earnest $
Septic must pass Inspection or you walk & keep your Earnest $
Well must pass Inspection, as well as the Water Quality or you walk & keep your Earnest $
Home Inspection must be approved by you or you walk & keep your Earnest $

Those are just some of the Contingencies, more are often added (Neighborhood, Feasibility for use, etc...)

REO's? They love to toss as many Contingencies out of the Contract as they can and THEY DO! Here, REO's are EXEMPT from completing Seller Disclosures, often require Offers without Inspection Contingencies, and never consider Offers without Pre-Approval Letters from another Bank and often their OWN BANK

Here, the REO's are the worst deal in town...

I encourage my Buyers to compare the Solds if in doubt of my input regarding REO's. I then pull the Listings and PROVE to them the REO's are sold for more then regular Listings and Short Sales! Of course that is here, but over and over there are bidding wars on...drum roll, you guessed it REO's! Sad that Buyers aren't realizing they are being taken for a ride. They buy homes that need a ton of work, pay too much, and later realize what a bad deal they got...

There are exceptions to this in other States, so don't start jumping on me about what I am writing. Also, there are exceptions in WA, in other areas. Where I am, it is flat brutal to see how folks are being taken advantage of.

__________________

Christie Acres
www.SequimForLife.com
http://www.irealtyvirtualbrokers.com...lori-christie/
http://luxurywaterviewhomes.com/
SequimLiving@gmail.com

Most places we are looking into we'd need to put about $5000 down on. These are in the $60,000 range. However, we were told today that there are programs that ask for 0% down, they just tack the extra money for closing onto the loan and the seller agrees to pay it instead. Then you are paying for it over time, rather than trying to scrape up the $ ahead of time. You might talk to a realtor and see what they can do toward setting you up with a person who deals with finances. This is where we are at. We are also working through FHA to see if we can do something through them. Keeping our options open.

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Consideration has nothing to do with how much money is required once your offer has been accepted and you are actually finalizing a purchase. Consideration is considered a symbol of a good faith offer thus is merely the monies that you put IN TRUST. Consideration can be a stated/required amount; it can be also nothing if acceptable to the other party. If there is no contract/meeting of the minds, your monies are refundable unless an idiot drew up your offer. PERIOD.

Yes, an Offer doesn't have to include Earnest Money (No REO accepts without...).

Earnest Money can be represented by a Check, which can be deposited in Escrow by the Buyer's Agent's Brokerage or 3rd Party, such as Escrow. In addition, Earnest Money can be represented by a Promissory Note. If a Buyer doesn't want the Earnest Money deposited until Inspection is Approved, a provision for such can be included in the Contract.

I include a provision in my Contracts for my Buyers to bring their Earnest Money straight to Escrow within 3 Days of Approval. That means I never touch the check or am responsible for it in any way (just insure it does get delivered by the Buyer).

__________________

Christie Acres
www.SequimForLife.com
http://www.irealtyvirtualbrokers.com...lori-christie/
http://luxurywaterviewhomes.com/
SequimLiving@gmail.com

I would make my offer as solid as possible, no contingencies. I would also satisfy myself as to the condition of the property prior to making my offer. This way there are no issues to deal with after the sale. You bought what you bought, at the price you wanted. On the seller side, they sold what they sold, and received what they were willing to accept. A seller, no matter who it is, is usually much more willing to accept an offer if it is not contingent upon aunt marthas cat having her next litter of kittens in a timely fashion. You need to decide if you want the property in its current condition, and if so then move forward. Know where the money is coming from, if you have to borrow, make sure you can borrow it before entering into any contract.

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"Nothing so needs reforming as other peoples habits." Mark Twain

In our area Keller Williams does all the Fannie Mae foreclosures (Homepath program). According to our realtor they get 1/2 the usual realtor fees and bonuses if they get rid of the property quickly and close on time. That can benefit the seller.

When we were looking 1 1/2 years ago all there was was REO's and short sales, we got a great deal on our place. Nothing around now at a similar price. I think it depends greatly what part of the country you're in as to if you can still get a good deal on a REO or get scammed.

FBB - if you're going to put an offer in on this property there is specific Homepath paperwork and pre-approval letters you need to put in with it. Get your realtor on it just in case.

Just that, very well put Yvonne. P or get off the pot, less messing around, things get done. Speed is the key, drag stuff out and the delays cost the buyer, time is money. Have ducks in a row, so you can take advantage of a deal if it is a lowball deal one is looking for.....

If you have to ask and debate every deal that comes along for a week or 2 or 3 to figure out if it is something, then the 'lowball cheap game' is not being played right. Look the place over, offer your offer on the barrel head, and move on to the next if not accepted.

Paul

Moose, Where did you see the ne im looking at had a septic system? If you attempted to answer my question about the shower, you didn't. Ill try to explain it again. There are bathroom facilities in 3 different rooms. A full shower in one, like for invalid people. A full Jacuzzi in another, and a full compliment of bathroom fixtures in another, sink, stool, and bath tub. Also, is mine the Bank owned, or the REO?
Lori I know about having to have a prequel before making an offer. I can get that easily. Supposedly that's why I lost that first place, the lazy girl banker didn't get off her pretty duff and send it to my realitor when I showed up at 11 00, and the realitor called at 7 that night and said somebody else had it cause she never got the prequel. I can get that easily.
On that first property, The REA did what you said, Took the check and put it wherever/held it? ect, then gave it back when the deal didn't go through

Im going to write down your list of prequals for a offer. Thanks.

Katy you say run from bank owned, and lori says REOs re the worst???
Elsbet, I am trying to buy with a type of loan that has ) down. It is a rehabilitation type of loan. I get a bank appraisel of what its going to take to fix it up. The bank loans that amount in pieces as the work progresses and I show where the money is spent. Then when the work is done to their satisfaction, they write my loan. They have already paid the owners off. I have around 6 mos to complete the work. More IF I show I am progressing and that the work is time consuming.
HUBBY, I am willing to accept the property in its current condition, BUT would be offering 2 different amounts depending on the septic question?

This is a good point to put in now. My boy and I are rather supprised that we cant find the lateral lines by the green grass all around above them. it could be that, because of all the rain weve had, that everything is as green as it ciould be nearly, and what difference there is between the grass above the LI and the grass beside them isn't noticible enough.
The bank SAYS they will loan me 66. They also say there are conditions that allow them to NOT loan me the 66. When I am satisfied with the septic question, I will then go to the bank and try to nail down what there stipulations are going to be, and how much of the work I can do myself, that being approved by a licensed contractor after being finished.
In the first house, the wiring was likely going to be a problem. In this one, built in 93, it shouldn't be. Same nearly with the plumbing. The roof is shingles, and a couple of them are laying atop the others. My boy says its possible to replace them, but hard.
Vosey. Ill get with my REA and see about this homepath IF my banker backs out.

Well, he answered the bathroom issue as best as can be, he said how it is typically figured. I'm not sure what they counted in the house you are looking at, you appear to have one full bath and you have 2 rooms with only just a single bathtub sort of thing in them, no stool, no sink? I'd count them as 1/4 each, but perhaps they are roughed in for a stool to be added or something, and that got stretched into counting for something? Would have to see it I guess to figure out, would be a good question for the showing agent for sure.

Real estate deals are like horse trading, used car sales, etc. sometimes it goes well, sometimes its a nightmare. You appear to be looking at properties that have lots of distress and difficulties and problems making them cheap, but these are the types of situations that are more likely to have lots of fuss and problems. The more you have set up ahead of time, and the more you can walk on quickly with the proper papers and all set to go, the easier it will be for you.

The loan you are pre approved for also sounds different, it appears to be a construction loan, not a buying loan, so are you good for the property yourself, and the $66,000 is to improve the property, bring it up to code? It sounds like you get that $66,000 doled out over time to add improvements, so I'm not sure where you are expecting to get the money to actually buy the property. I'm sure it works and is clear to you, but the different ways you describe that pre approved loan you have over the past year, I still don't understand what you really are approved for and to do, where the actual purchase money is coming from.

Paul

Rambler, The bank has approved my credit to the amount of $66,000 they will TOTALLY loan me. They want me to understand that, as you say, I am looking at places that need work and are therefore cheaper than others, to realize that I have to drive the selling price down low enough to, within the range of that 66 total, have enough left over after buying the place to fix it up to their expectations and requirements.
All I saw was that He had said that both places had septics. Ive looked and didn't see a thing listing or specifying anything about the septic in the place I want. I just want to see where to look for to see that for myself.
The place has ONE full bathroom, One room with a Jacuzzi bath tub , BIG, in ir, and a room with a walk in BIG shower in it.
The shower is gone. What I was asking is, With ONE complete bathroom, AND one Jacuzzi tub in it, Why, as my boy insists will the bank make me fix up the big shower also. HE says that, since it is part of the house, they will insist that it be replaced.

My wife and I are retired real estate appraisers and my wife was a loan officer for many years. My thoughts on a few of the issues brought up.

1. Pre approval amount $$. That is only the mount that they would lend you on a property if everything else met their standards, appraisal etc.

2. Having a pre appraisal. That is a good idea. Do not rely on a Realtors CMS or whatever it is. Rember they are trying to sell you something and may cherry pick the comps. Go to your lender and ask for a list of some of their preapproved appraisers and have one of them do it so that it could also work for the bank later.

3. In all offers have conditions that must be met before the offer is final. Some of them are:
septic system check and location

well water bacteria, nitrate level and volume check

home inspection - by a licensed home inspector - check with bank not Realltor. Realtor may recomment one that is not too fussy and won't goof up the deal.

Have a financing contingeny (I'm no speller!) that includes a specific interest rate.

A survey or the corners clearly marked by a professional.

Have a lawyer look over the deed or title insurance exceptions.

These are some but not necessarily all.

Good luck!!

Without a good Inspection (if the Buyer isn't qualified...), also a Full Title Review, a Septic Inspection, and a Well Inspection? One can get a great deal on a literal nightmare

Unfortunately, I have seen properties sold without Contingencies, seen the Buyers walk away in horror, let the properties go back to the bank, and nightmares get sold again.

I don't play Russian Roulette and consider purchasing real estate is too big of a cash outlay; I would never advise one of my own Clients to purchase without Contingencies to protect them. Trust a Bank? Nope!

Rarely are the "almost too good to be true deals" really too good to be true...

__________________

Christie Acres
www.SequimForLife.com
http://www.irealtyvirtualbrokers.com...lori-christie/
http://luxurywaterviewhomes.com/
SequimLiving@gmail.com

Nice catch.. Sure enough, there's a concrete pad for the compressor unit, and lines leading to it,. but there is no compressor..

Wonder if the rest of the AC unit is inside the house?

That's not gonna be cheap....

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Never let your fear decide your fate!
Kein Mitleid für die Mehrheit

Because the bank has rules, and rules need to be followed.

Their intrest is in getting the house fixed up nice and proper, so that it is worth more, and they have a chance to roll it or mortgage it again to the next buyer after you at a good intrest rate for a low risk.

A nice, well fixed up house is going to be low risk, easy to poll into other loan packages, and will sell quicker, all of which means they have less risk, and more to gain in a shorter time.

You keep looking at this from your point of view.

Bank doesn't care a bit about your point of view. They look at it from their point of view - good shape, low risk, worth more...

The type of loan you are getting is to take something not worth much, add money to it, and make it worth a lot more. That actually is a bit risky for your bank, so they want to make sure you increase the value of your house to reward the risk they are taking.

Without knowing the house at all and the layout, I'd sure want to turn it into a 1.5 to 1.75 bathroom house, and make the other room into a storage or office room. Just thinking out loud on that, but seems an odd layout currently with the scattered facilities in three rooms - sure takes away living quarters.

Any improvement plan you take to the bank, forget about your ideas. You need to show it increases the value of the house - add a feature that makes it worth more, like an office room, and they will be likely to go along with that. Say well I don't need no extra shower, I'm just gonna leave that room and let it collect junk and storage and they will -not- be happy, they want added value, not unfinished junk collection room with pipes sticking out of the floor.

Paul

Theres nothing inside the house except the furnace, which is a small affair, to me, as considering the furnaces I have seen in my past. This one is around 18inwide, 30in tall, and I don't know how deep as they have it built in between 2 walls.

It seems he is approved for a buying/ improvement loan of $66,000. At the end of the $66,000 the bank is going to want a nice neat working house all finished up. They will not loan the full $66,000 up front....

It would seem difficult to do all the work he needs to do for $6000, if he is buying for $60,000.

It still seems like a difficult loan to get approved on any property. Often the extra land is more of a hinderance; it has value, but is cumbersome for the bank to place a value on the extra acres as they do not fit well in the govt and big bank packages they are so fond of fitting these loans into.

Paul

Rambler, It is a rather odd layout. Im assumeing they had 4 bedrooms at one time. Its had ALOT of owners since 93, and I suppose one of them didn't have kids OR not that many, and they added the Jacuzzi, and large shower. ITS A BIG HOUSE. The rooms are big.
Well, I can put the shower back in there. Id like it better than the tub in the standard bathroom. Especially with a chair that you can put in those big showers to sit on while bathing/showering.
Didn't see any evidence of a well, UNLESS the spot close to the house I took as an opening for the septic might be a well. It better not be for both lol, so I assume its for the septic, and they have city water. I can witch a well, and believe that water would be easy to find.
I have been looking on U Tubes at ways to hand drill wells, as has my boy and we think that we could do some of that fairly easily and with not too great an expense.