More Home Buying News

[Whitewater]

Heh, the bank didn't stamp DENIED on our offer, yea!

They came down considerably from their asking price, and gave us a counter offer. Unfortunately, they're still above what our bank can lend us . . . and this is complicated even further by the fact that the loaning bank A) won't send an appraiser until we get to an agreement with the selling bank and B) is getting quotes of $25K to bring the house up to their lending standards!

Quite obviously we don't have that kind of money. So our lender told me today via phone that 'Well, we'll just have to offer them $75K with the $25K home improvement part and see what they'll say'. Keep in mind, the lending bank refuses to budge over their $100K pre-approval, home improvement loan and all.

The original price the bank offered to sell the home at was $149,000 seven months ago. Now their price is 109,000 and when we offered 90K (because we knew we'd have to have room for the repairs) they countered with 103,000.

We'd *like* to offer the selling bank back 96,500 but we don't know if our lending bank's appraiser will be able to tell us what needs to happen, and if anything can happen within our budget.

Most of all, I don't want to get caught entering an agreement to buy if the selling bank accepts $96,500 BUT the appraisal insists that we have to have $20K worth of work . . . which would put us at well over what our lender is willing to give us. Then we'd be stuck having to buy the home without having any way to pay for the repairs -- which the appraiser, or so I'm given to understand, will insist on being made before we move in.

The obvious solution would be to find another home, but we'll have the same problem. The bank won't lend us over $100,000 and what if we find a home listed for $80,000? What if the necessary repairs are $30K? We'd be equally screwed.

I don't know what to do. Do we put in another offer and hope? What will happen if the appraiser says it needs more work than we can afford? Can we back out? I don't have the answers to any of these questions.


Whitewater (seriously considering writing a letter to the selling bank and explaining that the house needs work, that our lender won't let us go above $100K and let's face it, they aren't going to get more than $75K anyway, which still means a profit for them because the last time the house sold, it was for $78K back in 1998, and after nine years of payments, plus $75K that we're offering . . . -- and now I'm pretty sure that THIS is the reason why this house hasn't sold yet, because the selling bank isn't willing to take less than what they think they can get. Unfortunately, in the current housing market, what they're going to get is people like us . . . so why not just unload the thing to us and get rid of it? Hey, it's worth a shot.)

[Blusher]

I don't know anything about home buying and such...but it sounds complicated. I hope you guys get the bank to listen to you guys.

[KMS]

I have had several family members/friends in the house market in the last year or so. It has been crazy to hear their stories! I know that it's going to be so over my head when it's our turn. Good luck!!!

[EarlyBird]

Heh, the bank didn't stamp DENIED on our offer, yea!

They came down considerably from their asking price, and gave us a counter offer. Unfortunately, they're still above what our bank can lend us . . . and this is complicated even further by the fact that the loaning bank A) won't send an appraiser until we get to an agreement with the selling bank and B) is getting quotes of $25K to bring the house up to their lending standards!

Quite obviously we don't have that kind of money. So our lender told me today via phone that 'Well, we'll just have to offer them $75K with the $25K home improvement part and see what they'll say'. Keep in mind, the lending bank refuses to budge over their $100K pre-approval, home improvement loan and all.

The original price the bank offered to sell the home at was $149,000 seven months ago. Now their price is 109,000 and when we offered 90K (because we knew we'd have to have room for the repairs) they countered with 103,000.

We'd *like* to offer the selling bank back 96,500 but we don't know if our lending bank's appraiser will be able to tell us what needs to happen, and if anything can happen within our budget.

Most of all, I don't want to get caught entering an agreement to buy if the selling bank accepts $96,500 BUT the appraisal insists that we have to have $20K worth of work . . . which would put us at well over what our lender is willing to give us. Then we'd be stuck having to buy the home without having any way to pay for the repairs -- which the appraiser, or so I'm given to understand, will insist on being made before we move in.

The obvious solution would be to find another home, but we'll have the same problem. The bank won't lend us over $100,000 and what if we find a home listed for $80,000? What if the necessary repairs are $30K? We'd be equally screwed.

I don't know what to do. Do we put in another offer and hope? What will happen if the appraiser says it needs more work than we can afford? Can we back out? I don't have the answers to any of these questions.


Whitewater (seriously considering writing a letter to the selling bank and explaining that the house needs work, that our lender won't let us go above $100K and let's face it, they aren't going to get more than $75K anyway, which still means a profit for them because the last time the house sold, it was for $78K back in 1998, and after nine years of payments, plus $75K that we're offering . . . -- and now I'm pretty sure that THIS is the reason why this house hasn't sold yet, because the selling bank isn't willing to take less than what they think they can get. Unfortunately, in the current housing market, what they're going to get is people like us . . . so why not just unload the thing to us and get rid of it? Hey, it's worth a shot.)


Basically you have to either put a BUY AS IS clause in it (you will be responsible for all repairs) or put a "reimbursment" clause in the contract whcih means that you can pick a couple things or amount and the bank has to pay to that amount. For example we bought our house with a contract that looked this way :

"Selling price of 179k; all appraisals and inspections must show the home FREE OF MOLD, ELECTRICAL MALFUNCTIONS AND PLUMBING MALFUNCTIONS. If any are problems are found, seller must pay to have repairs to home or give money at closing for repairs" Further in our contract it was stated Repairs for tile (they had 7 pieces of tile missing in the master bedroom) in master bedroom, kitchen tiles, countertops and crown molding are estimated at 2,000, seller must fix by day of closing or will pay 75% of repair estimate (this makes it so they can do it themself or find someone to do it cheaper ya know?)

these are just some options for ya --- sorry- im in the business!

[EarlyBird]

the answer becomes, You CAN NOT back out b/c of anything an appraiser says (for example, if it appraises at 75k and your paying 95k) without losing your deposit. But if your contract writes "Buyer can get deposit back and will be void of all purchasing responsibility should repair estimate be more then (x amount of dollars) or if any electrical, structural, plumbling or insects malfunctions are found" Other then that, if you back out, you can lose your deposit. :) Make it contingent on the inspections and PAY FOR YOUR OWN INSPECTOR.. DO NOT GO THROUGH THE BANK AND USE THEIR INSPECTOR.. please!!!! this is sooo important b/c obviously their inspectors WORK FOR THEM and will say anything they want/need as long as the house is literally standing!

[saltyveruca]

That really sucks. The credit market is horrible right now, so that's why they're being stingy. I'm sure you've heard about all of the foreclosures and such-big mortgage banks are really suffering, so they're trying to be really conservative in their investments (investments being your mortgage).

I know this isn't what you want to hear, but it might be wise to rent a home for a year or two (perhaps a lease purchase) until this mess blows over and you can get qualified for a home that works for you. I know home prices are low right now, but most experts are fairly certain they'll go a bit farther, so if you wait long enough you could find a sweet spot of lower prices and better credit. Waiting will also give you time to squirrel away more money for a down payment, which will make you a more attractive investment and boost your buying power. My FH and I are planning to buy a house, and we're waiting it out for a bit (the home prices in Houston aren't dropping as much as we'd like).

[Whitewater]

Thanks, everybody!

Believe it or not, we've decided to go in a bit of a different direction. Since my original post we've found a home that's the same style and the same square footage (and roughly the same layout, at least, according to the pictures) as the home we made an offer on BUT --

The new home isn't bank owned. It's in much better shape. It's 8 years newer than the original one. It's owner-occupied (a big plus when a good 75% of the homes here in our price range are vacant), and it's got a yard that's quite literally about three times as large as the other, which backs onto a large parcel of land that will never be developed, quite woodsy and very pretty. The sellers are quite motivated to sell and this home is currently being offered at 109,000. It's been on the market for a little over 100 days and was originally listed at $159,000, though the current tax value is about $215K!

The cons to this one is that we're going to lose a partial bath and a bedroom -- for being the same square footage it's only got three bedrooms instead of two and only one main bath instead of one full and one partial. HOWEVER, to offset that, it also comes *with* all the appliances, so we don't necessarily have to buy new ones.

But the best pro of all is that this is not a forclosed property and will more than likely make it through the FHA loan appraisal with flying colors so that we can offer more of what we can afford and not have to sink 25% of our mortage money into repairs! That means we can give the sellers a decent offer, finally, which is nice.

(Did I mention there's a fireplace in the living room? And central air and a modern furnace? Yes, it has all of those . . . which the original property *doesn't* have).

With luck we'll be able to see this new property within the next 48 hours and if we like what we see, put an offer in. Who knows?

Keep your fingers crossed!

PS -- I know this thread is sort of turning into Whitewater's Home Buying Adventure Blog, but if I *promise* to limit my home buyer stories to this thread, can I talk about them, even if they are off topic for a wedding board? Maybe somebody else will read this and it will help them.


Whitewater

[Whitewater]

Ok, for some reason I can't edit my post above. Just in case anybody catches my slip, I wrote "We'll be losing a partial bath and a bedroom" because the initial home we put an offer on has FOUR bedrooms! Since the new home that we're going to see has THREE bedrooms (and only one bathroom, as opposed to one full and one partial), that was what I meant.

Apologies for the confusion.


Whitewater

[EarlyBird]

With the extra sq. Ftg and the extra money you will be saving with the renovations, you can save to add an extra bath in the home -- We added an extra bath and i have NEVER seen anything so easy in my life!!!

a toliet and a sink and some water lines being run and it was the EASIEST adventure we ever had !!

[EarlyBird]

depending on where the bathroom is you may not need an extra :) I was just thinking that- I mean if its in the master, you dont want any guest trecking through your room-- but frankly that would be a TERRIBLE lay out :) For us, the entire thought of adding a 3rd bathroom in our house drove me nuts but then we added our 3rd bedroom and fh was insistant on a 3rd bathroom