Buy a House Fast

You’ve probably heard a lot of contradictory information about getting a mortgage loan lately.  Interest rates are low, but it is harder to get financing.  Part of the reason getting a mortgage is hard may center on your income or credit score, but there are often other reasons.

The culprit may be the house itself.

Right now, there are many housing bargains in the marketplace, especially on foreclosed property. The cheap price often reflects the condition of the place. Costs can add up when replacing appliances, windows, water lines, and pieces and parts often taken by former owners or vandals.  Some lenders refuse to finance these deals or may bail on a promise of financing once they determine the home’s true condition.  In some cases, a prospective owner might look for a 203k loan that wraps repair costs into the mortgage, but often these deals are cash only.  The amount required for repairs may put the value of the home out of sync with values for other homes in the neighborhood.  Lenders, already stuck with mortgages worth more than homes, don’t want more deals like this.

Some loans are turned down because the appraisal showed the home was worth less than the prospective mortgage.  Lenders won’t write loans where the appraised value is out of whack with the selling price.  (Why?  See above.)  Appraisers used to modify their estimates when needed, but new rules have limited communication between the appraiser and all parties in the sale.  After the fact, an appraiser might reassess if comparable neighborhood selling prices show he was too low, but he may not budge.  The buyer can request a second appraisal, at his own expense.  Bottom line, either the seller must agree to lower the price or the buyer needs to come up with more down payment if he wants the mortgage.

If you are buying a condominium or a co-op, your loan might be turned down because the bank doesn’t like how your condo is run.  Some banks won’t write loans if more than 10% of the units are owned by a single owner since this would increase their risk if that owner defaulted.  If a building has been converted to condos from apartments, if the owner has bought units back, or if the owner holds back some of the units for rent, many banks won’t finance the prospective owner of one unit.  Banks might also refuse loans if the association doesn’t have enough insurance to protect against theft by employees or enough reserves set aside for repairs.  Before you apply for a loan on a condition, make sure to check what the lender’s requirements for condo loans are.

Looking for a home in DC, Maryland, or Virginia? Express Realty Services will help you find a home you like and point you to a lender who can help you.  We specialize in selling remodeled, renovated, and refurbished homes acquired by our sister company Express Homebuyers.

If you are thinking of buying a foreclosure, you may get an unexpected glimpse into human behavior: people do crazy things when they are under stress. You might expect to see a home that is run down, but you may not be prepared for the state of some foreclosed properties.  The current foreclosure crisis has resulted in a rash of trashed, smashed, and stripped-bare homes for the next set of owners to deal with.

Many homeowners, strapped for cash, have ripped out counters, appliances, light fixtures, or cabinets to sell and may have intentionally damaged what’s left, out of anger.  Maybe some people think they are only getting back at the bank, so don’t care about the condition of the home.   Vandals have often come in and finished the job of gutting the home of anything of value.  It takes a buyer with vision and sometimes deep pockets to overlook the damage and see a livable home underneath.

Needless to say, many foreclosed owners do not follow the basic law of what stays with the house: If it’s attached, it stays!

This includes:

• Doors and windows
• Furnaces and air conditioning unit
• Floor, ceilings, and walls
• Electrical wiring
• Counters tops and cabinets
• Sink drains, and faucets
• Built in appliances
• Plumbing fixtures, including toilets, tub, and pipes
• Built in medicine cabinets, sinks, and showers
• Built in shelving and bookcases
• Landscaping, fences, built in pools and spas

These things can go:

• Furnishings and personal property
• Mirrors
• Arts work and photographs
• Pets and their things, including dog house, aquariums, or bird cages
• Refrigerators, televisions, computers, stereos
• Throw and area rugs
• Indoor plants
• Portable fans and heaters.

You can hardly read this list without alternately snickering and shaking your head.  Doors and windows taken?  Walls?  Unfortunately, we are too used to hearing about homes being gutted for copper piping to react at news that people now steal even the obvious things!

If you are thinking of buying a foreclosed home, replacing all these essentials can be costly.  So can removing trash left in homes if the previous residents left quickly without taking everything they owned.  If the home is bank owned, the lender might have filed claims against the former homeowner’s insurance – or come after the former owner. You, as a buyer, have no recourse against the former owner.

Get Prepared With a Home Inspection

If you are up for the challenge of purchasing a foreclosed home, make sure to get a home inspection. You are unlikely to get any guarantees on the home or recourse against the lender or former owner, but an inspection will list the obvious and hidden damage to prepare you for the work ahead.

Horror Stories, Yes. But there is a Bright Side!

As long as you know what you are getting into, foreclosed homes can be a great value.  Since almost every neighborhood these days has its share of foreclosures, you have a choice of properties in areas where you want to raise your family once you have brought the property back to its former glory.

Express Realty Services can help you find foreclosure property as well as fixer uppers, quality remodeled homes in Washington DC, Maryland, and Virginia. Whether you want a home in move-in condition or are prepared to do some work, we have the home for you.  Contact us today to get started.