If At First You Don''t Succeed . . .

[Haven]

put in an offer on another house!

So I posted my excitement when I thought we first found the house.
BUT that didn''t work out, so we went back the the drawing board. WELL, in the few days that we spent trying to purchase house #1, the townhouse that we we originally wanted went down in price $20,000!

SO, we put in an offer this morning. We''ll be happy to get it at the asking price, so unless some other buyers scooped us, we have a pretty good chance at getting this townhouse! It''s a 2 bedroom, 2.5 bath with a 2-car garage and full basement. It''s actually more living space than the house we wanted, and it''s in a better location. That house was just so damn cute and really nicely updated inside. HOWEVER, if we get the townhouse we''ll be spending far less, so we can just update it to suit our own tastes.

It is a foreclosure home, which makes me sad, so it''s owned by the bank and we''ll be buying it "as is". Any words of warning or suggestions about that? (FYI: It''s priced at $229,900, it was originally priced at $259,900 and then $249,900. The owners purchased it for $250,000 four years ago, and the bank paid $268,000 for it. The comps have sold for between $275,000 and $315,000 in the last four months, so it looks like a really great deal even at the current asking price.)

I''m really excited! I guess the fact that that house came along and distracted us was a good thing, because it gave the bank some time to lower the price again!

 

[door knob solitaire]

Yes, My advice is to have the house inspected. You need to know what issues it might have. You aren''t going to be reimbursed as you are buying it as is...but you need to beware that the central air system may need to be replaced before spring...or the hot water lines to the washing machine aren''t up to code and it will cost you $550 clams...or the roof had leaked into the insulation and soaked it making it useless...or....there are so many things that can nip you in the wazoo that knowing ahead of time and paying that minimal fee of $250 to $1K is well worth the investment as apposed to the $225K.

Not all as is purchases are bad...but why gamble? Know what the cards are that you will be dealt, before the game starts. Oh, A lot of lenders won''t lend on an AS IS purchase. If it doesn''t pass inspection, no dough. Oh if there is need of roof repair, your insurance company won''t insure you until the repair is done. This things are usually done prior to selling a home regular...not AS IS.

So...just be aware of what you are buying by simply paying a professional to advise you. There is nothing to be scared of...but the unknown. So just know before!! Oh, I like the two car better!! §

 

[robbie3982]

I''d be really wary of something that the bank is selling for less than what they paid for it. I''m not sure where you are or what your market is like, but the market here is pretty bad (good for buyers!) and the banks are still not really selling for less than what they paid unless they know there''s something wrong. We looked at a few. They all had the same problem: mold

.

 

[VegasAngel]

Ditto what DKS said, get it inspected. It make look fine but there can be hidden problems & inspectors check everything. As for the price I believe the bank will lower the price to generate offers & go with the highest bid. Goodluck!

 

[MichelleCarmen]

Yep, get the house inspected!!!

A few years back, my husband and I looked at two houses which had been foreclosed on and both were selling for astronomical prices! One was nearly $40,000 more than similar houses. So, I would tend to agree with Robbie that there may be something significantly wrong for the bank to risk a loss like that.

FWIW, about 10 years ago my mom bought an auctioned off foreclosed home on 5 acres for only $100,000. The reason she got it so cheap is that the previous owners had tried to burn it down to claim insurance!!! The house was really cute, but it required an unreasonable amount of work and I would guess that the bank didn't feel like paying out the contractors. My mom got a great deal, but she never quite managed to finish the work.

ETA - I just want to wish you good luck! I hope that the inspection comes back good

 

[Haven]

We are definitely going to have it inspected before we buy, but I'm surprised--don't all buyers have any house they are planning to purchase inspected before they buy it, foreclosure or not? Based on everyone's responses it sounds like an inspection isn't as routine as I thought? We both had our condos inspected before we bought them, and they definitely weren't foreclosures.

As for the price, we asked our financial advisor about that and he says that it's not unusual for a bank to sell a home for less than they paid for it if it isn't selling at the price they're asking. We definitely wouldn't want to buy a home if there were any problems, but our inspector should identify these, right?

The good news is that FI's father buys and sells a lot of real estate and he's been to the townhouse twice and says it looks good from his point of view. Here's hoping that it works out!

ETA: I appreciate the words of caution, I'm so excited to find a nice townhouse for so cheap, so it's good to have some realistic concerns brought up.

 

[MichelleCarmen]

Usually houses are inspected, but we didn''t have our current one inspected! The sellers had only purchased a year before they decided to sell and we were able to see the previous inspection and everything checked out fine. It sounds crazy that we didn''t have anyone look at it, but you''d have to see our house. It''s on an arboretum with heavy landscaping and from what we gathered the sellers couldn''t keep the yard up and had no choice but to sell and they put the house up on the market on a holiday weekend, and the agent went out of town, and that is the ONLY reason we had a chance to think about it for a few days (since it was quite a bit more than what we had planned to spend) and put an offer in.

 

[Haven]

MC, your house sounds GORGEOUS! (And you''re thinking about leaving it to work outside the home? So silly!

)

 

[BriBee]

Where I''m from (CA) it''s the norm to have your house inspected before you buy it. Also, I have seen a lot of homes in forclosure that are selling for less than what it''s worth/what owners paid/what''s owed etc... (My dad is a real estate broker, so we have lots of access to inside info) That being said, as long as you get an inspection, I think that you''ll be fine. I personally wouldn''t be alarmed to see houses going for these lower prices because a bank would rather sell the house for below market or loan value, and only lose 10K or 20K or 30K etc...rather than lose the entire amount, say 250K. In fact, I''ve seen houses out here go for 100K less than what they''re worth!

 

[door knob solitaire]

The difference here is that the inspection has NO bearing on the sale. You are buying it as is. In a normal RE transaction the seller has usually meet all the non conforming issues before they sell it. And yes an inspection is required before you bank loans the money. (Generally). But in this case you are buying it as is. So the inspection no matter how scary it comes back will have no bearing on the deal. You are already entering into this knowing they warranty nothing.

For an example in a usual transaction it may be found the the A/C needs service and freon...so you negotiate a price of $500 less than to cover the malformities that were found...not so in this case. Every thing you learn is something to add or help you make the decision to enter into a project or not.

I don''t agree that just because the price is low you should be wary. You see it is generally the buyer of an AS IS is not the Joe Public buyer. Because many lenders will not lend on an AS IS purchase. They don''t know any more than you do what is wrong. Many buyers today don''t have enough down to get in the house they are looking at...so they have to get PMI to cover the spread...and the lender is not going to extend themselves further on a risk on an AS IS.

It is possible that this AS IS is just a house without warranty. No particular reason...but inspect it well...and be aware that you may loose your deposit...as you agreed in the beginning to the fact you were buying it AS IS. NO WARRANTY NO GUARENTEE. OH absolutely...POSITIVELY...WITHOUT A DOUBT...get title insurance.§

 

[onedrop]

Housing inspections are the "norm," but back when it was a seller''s market I heard of people waiving inspection in order to have their contract accepted. Some might have been lucky and had no problems, but I also heard of other that had big regrets. In addition, I agree that just because the bank is asking less than what they paid, that is not necessarily a red flag. The bank isn''t trying to be a landlord or real estate owner, so they aren''t aggressive about making a profit. I think you''ll be fine, as you seem to be taking all the right measures. Good luck with everything!!

 

[Haven]

In an ironic twist, the realtor from the last house that we bid on (the one I thought was THE house) just called our realtor and asked if we would be interested in purchasing it fo $260,000. Our final offer was $258,000. Interesting. They apparently found a house they want and now they have to sell their house for a reasonable price and can''t hold out for a ridiculous amount of money anymore.

We''re going to wait and see how the townhouse works out first, because it''s a better deal, in a much better school district, and more space.

 

[door knob solitaire]

Honey...did you find out if the AS IS house is insurable yet? I hate for you to loose the first one, thinking you have a bird in the hand...because generally AS IS are only obtainable by those who can get the finances elsewhere. A mortgage won''t be issued if you can''t insure the townhouse. It is possible that it needs a new roof before it is insurable. (Or something similar).

You got that in my other post right? If you guys are up to speed on that than forgive me for coming back with my nose and poking it around. Just want to make sure to emphasis my experience so you will understand. A better deal in price...yes...but you must do your due diligence to find out why. Talk to the neighbors. See if you can locate previous owner. They may be willing to talk or if they lost it due to foreclosure...maybe not. You never know.

I heart you haven baby. Got your back, kay? §

 

[Haven]

I hear you, DKS, and I heart you, too! I REALLY appreciate your advice. I emailed our mortgage broker after I read your first post to make sure we''d still be able to get the mortgage and he says we are good to go. Now, what would I do without you?

 

[door knob solitaire]

Yippee. Hubby just told me the same....it is just a call to the mortgage co! I didn''t know that. Thought it would take an army of inspectors. That is why we got ours so cheap. There were issues...and no one that was interested could get financing. FHA is really tough I have heard. Your steps must be a certain width...light fixtures may be required to house 100 watt bulbs...really strange little ticky tacky things.

Well, Yippee for you then! More space!! So what is the time frame of the process? When will you know anything? Will ya post some images soon?

What would you do without me? I bet cha you would figure it out!!!

But I am glad for now you aren''t on the fence about me. Your aren''t are you?

§

 

[Emeraldfan]

Haven - I just wanted to wish you luck!! Hope you get the townhouse! It sounds really nice and more square footage is always great.

 

[zoebartlett]

Date: 12/22/2007 6:06:35 PM
Author: Haven
In an ironic twist, the realtor from the last house that we bid on (the one I thought was THE house) just called our realtor and asked if we would be interested in purchasing it fo $260,000. Our final offer was $258,000. Interesting. They apparently found a house they want and now they have to sell their house for a reasonable price and can''t hold out for a ridiculous amount of money anymore.

We''re going to wait and see how the townhouse works out first, because it''s a better deal, in a much better school district, and more space.

Wow! Some things really work out for a reason, don''t they? Now you''re still in the running for TWO great places> Yay! Let us know what happens.

 

[Haven]

Date: 12/22/2007 8:02:46 PM
Author: door knob solitaire

What would you do without me? I bet cha you would figure it out!!!

But I am glad for now you aren''t on the fence about me. Your aren''t are you?

§

Oh, DKS, I am OVER the fence for you!

I appreciate your input very, very much.

Thanks to everyone for your enthusiasm--I''m really excited about purchasing a house with FI, it''s been nearly four long years and I am so ready to live with that man.

Don''t worry, I will post as soon as we hear anything (which probably won''t be until after Christmas) and then I''ll definitely post pictures. We''re planning on redoing everything, which is even more exciting for me!

 

[Haven]

We didn''t get the townhouse.

We put in the first offer on the 21st, they got back to us on the 4th to tell us it was REJECTED. No counter-offer, just rejected. So then we put in another offer today, but another party put in an offer and they took the other offer. Our realtor thinks the other offer was put in by an investor who is going to pay cash and close this week.

I''m so bummed. I don''t even feel like looking for a house anymore. I think I need a break.

 

[Tacori E-ring]

Haven, DH buys foreclosures as a living. Usually we add $15,000 of work into the budget (that is with him doing most of the labor or knowing people who can do it at a good price). It is sad to think about but the circle of life I guess. Right now there are so many b/c adjustable rates were so popular and now some are higher than most credit card''s APR!

As hard as it is do not get emotional about it. Banks will sell for less b/c it is SOOO expensive for them to hang onto them. By law they have to have the money to cover the house which means they can''t use it to make more money (by lending it to smaller banks for example), they have to pay taxes on it, worried about any crime (vandals, squatters, etc...), realtor fee, etc....

 

[Mara]

Awww Haven so sorry to hear that.

But don''t worry...I am a total believer in house fate. You WILL find the place that is meant to be yours....maybe take a little break and then start looking again in a few weeks.

I know it''s a downer right now because you invest so much emotionally in it, but when you are in the house you guys do end up buying you will probably look back and think WOW that was such a lucky thing we didn''t get that OTHER place!

 

[door knob solitaire]

Haven...I am sorry. Eat some chocolate take a bubbly...regroup and it will all look better in few sunrises. I know you are disappointed. But don''t be discouraged. You never know...the very next one may be three times better than anything you could have imagined! Some one just got transferred this week, and their house will be available.

I don''t believe to much in that meant to be stuff enough to give you those silly little quotes. But I do believe houses are different than say cars, or jewelry, or even careers. Your home is your HAVEN and it protects you from the elements, it surrounds you with comfort and it is where memories are made. Your home has to fit you. It has so many things it has to provide specifically for you. So I encourage you to continue your search...but maybe add some sort of element that is not the normal way most do.

Is there a house or townhouse you would love to own? Well, Missy, you just march right up to the door and ask if it is available. Too forward? No biggie. Write a form letter expressing you have admired THEIR home for a while and were wondering if it will be available anytime soon. Place the letter in the mailbox or mail it to them. You never know...your dream home may be waiting for you to make the effort. Grab what is yours!! §

 

[door knob solitaire]

Oh Hubby wanted me to tell you if you ever find an AS IS again...offer the asking price with no contingency. He NEVER pays retail for anything...and has to have serious therapy when he gets an AS IS...but he always gets them Because he pays what they are asking. The game works like this...we want X you offer X and that is that-closed book. They are already expressing that want to spend no more time on it...so make them happy and give them what they want-out they want out as quick and easy as possible.

He thought it was strange that your agent didn''t encourage you to do the same...he said if they didn''t...get another one.

§

 

[Haven]

Thanks for the encouragement, ladies. I''m definitely bummed because this townhouse was a great deal, and it is really nice, almost too good to be true, actually.

Mara--I totally understand what you''re saying about looking back and feeling lucky that it didn''t work out because we''ve already felt that way about the last house we wanted, so that made me feel a lot better, thank you!

DKS--Is it sad that I skipped lifting after work and went to Portillo''s for my favorite chopped salad? I don''t like chocolate, but that chopped salad was some serious food therapy.
I love your idea of asking the owner of a home we love if the place will be for sale soon, I actually have a friend who sold her downtown condo that exact same way.
As for the offer--we increased our second offer from just $2,000 less to $500 MORE than the asking price once we found out there was another offer on the table. Unfortunately, my realtor got the impression that the other offer was actually for less money than we offered, but they were paying cash, whereas we are going to have to get a mortgage. The only contingency in our offer was that we''d need to secure a mortgage (we''re preapproved, though.)

ANYWAY, I''m bummed but confident that we''ll find something better. Thank you for all of your great advice and support!

 

[MichelleCarmen]

Haven - I'm so sorry! Hope you have good luck in finding a home in the near future.