REO questions

[Aly W.]

I also have a few REO questions and can't find the answers through the Search function. Feel free to point me to the right thread.

A REO has been on the market here for a week at $165K. The kitchen has been gutted, and the wiring by the previous owner was half completed (240 amp). The listing says cash only or 203K rehab loan due to the condition.

The ARV based on recent comps is about $190K. The house is a 2 bedroom/1 bath, 2 car detached garage. Water heater is missing, garage roof is collapsing, and the interior needs at least $40K of work including all window replacements. All C/O, permits, and certifications are on the buyer. Good location, some rooms are in decent shape, Craftsman-style details throughout. No offers yet, there have been several showings. The outstanding mortgage prior to the foreclosure was $215K, and the house has been vacant for 2 years.

Paying full cash is out of the question. I'd be buying the home with my fiancee to live in eventually, as it would take time to rehab.

My questions are: any recommendations for FHA financing for the rehab loan? The selling agent recommended Countrywide - no thanks.

Is offering 60% of the list price a realistic place to start? Commissions are 2.5% to buyer and seller agents, minus $100.

Thanks!