What if the agent had already done the estimated repairs on the REO you wanted?
We are working with Lowes and Wells Fargo to make the 203k Rehab process as smooth as possible for a buyer. On my listing at 167 Proctor Hill Rd in Hollis, NH, we are having Lowes come out to give us estimates on:
- Tile flooring in the entry and kitchen
- New kitchen appliances
- New countertop
- New lighting
- Carpet in the living room and bedrooms
- Paint
All a buyer will have to do is choose their colors and design. We hope this will allow the buyer to have the house they REALLY want.
What about the rehab loans I’ve heard about?
So… you’ve found a great home but it needs some work and you don’t have the money in hand to pay for it. What do you do?
The FHA 203k loans are a great option. Here are just a few of the things that can be included in the loan:
Replace:
Roof
Flooring
Major Appliances
Upgrade:
Plumbing
Heating
Electrical systems
Make sure the Mortgage company you use is very familiar with the process so you have a smooth transaction.
Should I pay for a list of foreclosed homes?
I get quite a few calls each week from interested buyers about some of my properties that sold last year. They have suscribed to a website or paid for a list of foreclosed homes. I always tell consumers not to waste their money. Most of the times these lists aren’t accurate. Why not find an agent who specializes in selling foreclosed homes. Most likely you will hear about properties before they come on the market. How do you find an agent? Google REO realtors or agents who sell foreclosures in xyz town.
So… I had my inspection and the pipes have burst and the heating system is junk
You’ve had your inspection, un-winterized the property and realize you have frozen pipes and/or the heating system doesn’t work. What do you do now?
You have a few options if you still want the property and all of them need to be approved by the Seller through the Listing Agent:
1) Can you get an FHA Rehab loan that covers the cost of a new system and any other repairs that were needed.
2) Will the seller consider paying for a new system? If not will they let you raise the price of the offer to cover it and have it paid to the contractor on the HUD?
Those things really should be discussed as options with your agent BEFORE you make an offer on a foreclosure. An agent who is familiar with the process should be able to walk you through a few scenarios before you spend money on a home inspection and an appraiser.
Home inspections and Winterized Homes
So you’ve made an offer on a foreclosure and now you want to have a Home Inspection. The only problem is the home is winterized and it’s the middle of winter. You know the property is sold “As Is” but you want to make sure the pipes haven’t frozen and the heating system is functional. If you are getting a loan on the property your appraiser is going to want to see the water and heating system are all functioning as well. So what are your options?
First you need permission from the bank through the listing agent that they will allow the property to be un-winterized for inspections. If they will, most likely you will need to use their plumber. The cost can be around $250 to un-winterize and $250 to re-winterize it depending on the type of property. Make sure you negotiate who pays for that in your offer.
At this point you really only have 2 options:
1) You do a dry inspection, test everything else in the property, even run compressed air through the pipes to see if there is any freeze damage. Have the appraiser come out and test everything but the water and heat. About a week before closing, have the property un-winterized, pay for the appraiser to come back out and if the bank allows it leave the heat on until closing.
2) You will need to have the property un-winterized and have your home inspection and apppraiser come out to the property on the same day. Some lenders are not coopertative, check with yours. The property will be re-winterized within 24 hours until closing. You will be responsible for un-winterizing it again after closing.
These issues can be tricky, make sure you have an agent who is familiar with selling foreclosures to walk you through the process.
