All Forum Posts by: Sarah Taylor

Our contractor said it's not worth it. He said if it were him he'd tear it down and build new before putting money into a renovation of the place. He said it's that bad. We've moved on. 

To eliminate the mortgage contingency the parties could execute a "cash contract" in which there is no reference to buyer financing and the mortgage clauses are deleted. Note that a "cash contract" does not require the buyer to pay all cash, it just means that the buyer is not entitled to the return of his deposit if he doesn't obtain a mortgage commitment.

Hi,

We are looking at an REO property that will not finance traditionally. It needs too much work (we are not sure yet how much the rehab will be, working on getting an estimate now. 1800 sq ft needs two baths, kitchen, floors, lots of walls, a few windows, heating system at least.)

The bank is asking 99k, it just came on the market. It's owned by Wells Fargo and they have it in the MLS and are also utilizing the Hudson and Marshall site. It is open for pre-auction bidding right now. The county has it assessed at 180k. I think after repairs it could sell in the 150k to 160k range if you were to sell it. I don't know a lot about rehabs but I have to guess it'll be at least 40k, could be more. With these figures I know paying 99k for it is too much.

We have access to about 60k cash, but that would require us to access equity in our primary home.

I spoke with a local bank that will do a purchase/construction loan, but it sounds complicated, especially with it being a REO, and would require the bank to go for that which feels unlikely.

Any advice or creative thinking on how we can get this house? 

Sarah 

Hi,

We are looking at a property that is owned by Wells Fargo, so would appreciate any bank specific advice or tips. 

It's new to the market, but the listing agent seems to have all but washed their hands of the property, not responsive and when my buyer's agent finally got a hold of some one in the office the listing agent directed him to just submit any bids directly through another 3rd party. (I am thinking it's Hudson and Marshall because it is listed there as an "auction" currently.) The realtor is out of town, a good hour away I would say. 

The home went in the MLS a little over a week ago, and I wanted to see it right away, but it wasn't ready. We were able to get in Friday, and it needs A LOT of work. It is definitely not finance-able. The bank did some cleaning out, but there is a lot left, and the home is not very secure right now nor weather proof, and winter is coming quick.

H & M is taking pre-auction bids, but has no starting point or list price. The MLS has it listed for 99k which I think is overpriced given how much work it needs. (We are going to have a contractor out to get a better idea on this, but all rooms have holes in walls, none have acceptable flooring, neither bathroom is functioning, the heating system is not functioning, there are broken out windows, though the intact ones are replacement. The roof is newer. I could go on.) The tax assessment is $180k, and I would say (rennovated) you could ask that, but would actually get closer to $160k because properties in this market tend to sell a good 10-15% below asking after sitting, it's a heavy vacation/2nd home market.

I have spent the whole weekend reading non-stop about REO, these auction sites, how to make your bid stand out etc. We have no experience with this and are not investors. We hope to buy this as a 2nd home/vacation home, it's in an area we have been watching for years, and this seems like it could be an economical way to get what we want. (I know you aren't supposed to be emotional about a specific property and look at A LOT of them and hopefully catch a deal in there somewhere, so we are breaking all those rules.) We very much are interested in this particular property.

We are thinking about getting a Home Equity loan with our primary home, using those funds to pay cash and fix the house to the point of it being finance-able. Then we would get a mortgage on the home, pay of the home Equity and use the rest to finish the renovations and get it how we really want it. Does this sound feasible? Are there major things I'm missing?

Thanks!
Sarah

Hi. I am also interested in an answer to this question. We recently found and REO property that is listed with Hudson and Marshall, and I saw the same things listed in the terms which seemed contradictory.

Thanks for any replies or insight!

Sarah