Condition of Financing

[coinebro]

QUOTE (thomasbeyer2000 @ Jun 4 2008, 02:57 AM) $10,500 off for footings, roof, furnace may NOT be sufficient.

Consider writing a MUCH lower offer. Consider walking.

Yes, get a financing in place due to these MAJOR deficiencies !!

Then, write a lower, UNCONDITIONAL offer !

Footing and foundations can cost a lot of money to fix, depending on the problem. Where I live a high efficiency furnace is 5000.00+ and a small roof tear off and redo is easily over $ 5000.00. I would agree with a much lower offer, probably $60,000.00 lower.

 

[spike9294]

Hello,

I put an offer in on a house rescently that was accepted for $90,500 with the condition of financing, home inspecton, and approval of renovation permits.

Financing and permits were approved, but after the home inspection was complete, we found major issues with the footings, foundation, furnace and roof. I am going to resubmitt a new offer at $80,000 to offset major repairs.

My agent said it had a vey good possibility of being accepted if I wave all the conditions, including financing. With the fact that I was already approved at $90,500, should I remove the finincing condition?

I am conserned that the lender may become suspicious of the condition of the house when getting approved for the new amount. The appraisal was done based on the location, square footage and prices of similar homes in the area.

Any advice would be appreciated.

Mike F

 

[realfortin]

QUOTE (spike9294 @ Jun 4 2008, 01:15 AM) Hello,

I put an offer in on a house rescently that was accepted for $90,500 with the condition of financing, home inspecton, and approval of renovation permits.

Financing and permits were approved, but after the home inspection was complete, we found major issues with the footings, foundation, furnace and roof. I am going to resubmitt a new offer at $80,000 to offset major repairs.

My agent said it had a vey good possibility of being accepted if I wave all the conditions, including financing. With the fact that I was already approved at $90,500, should I remove the finincing condition?

I am conserned that the lender may become suspicious of the condition of the house when getting approved for the new amount. The appraisal was done based on the location, square footage and prices of similar homes in the area.

Any advice would be appreciated.

Mike F

I`m not sure about the answer to the actual question, but it sure is a great example of how spending the money to get inspection done will save you a bundle and a lot of heartache. Well done and thanks for the reinforcing lesson.

Réal

 

[RebeccaBryan]

Lots of things can determine whether a lender or broker will not give you financing, therefore, I would be upfront and honest with your lender and ask them outright if the situation you have run into would cause them to cancel. Get it in writing.

 

[Thomas Beyer]

QUOTE (spike9294 @ Jun 4 2008, 02:15 AM) Hello,

I put an offer in on a house rescently that was accepted for $90,500 with the condition of financing, home inspecton, and approval of renovation permits.

Financing and permits were approved, but after the home inspection was complete, we found major issues with the footings, foundation, furnace and roof. I am going to resubmitt a new offer at $80,000 to offset major repairs.

My agent said it had a vey good possibility of being accepted if I wave all the conditions, including financing. With the fact that I was already approved at $90,500, should I remove the finincing condition?

I am conserned that the lender may become suspicious of the condition of the house when getting approved for the new amount. The appraisal was done based on the location, square footage and prices of similar homes in the area.

Any advice would be appreciated.

Mike F

$10,500 off for footings, roof, furnace may NOT be sufficient.

Consider writing a MUCH lower offer. Consider walking.

Yes, get a financing in place due to these MAJOR deficiencies !!

Then, write a lower, UNCONDITIONAL offer !

 

[spike9294]

QUOTE (coinebro @ Jun 3 2008, 09:21 PM) Footing and foundations can cost a lot of money to fix, depending on the problem. Where I live a high efficiency furnace is 5000.00+ and a small roof tear off and redo is easily over $ 5000.00. I would agree with a much lower offer, probably $60,000.00 lower.

Sorry,I need to give a little more detail. The house was originaly listed for $114,000, went to $104,000 then $98,000.After my own initial inspection I submitted an offer for $85,500 ( taking repairs into consideration) and we settled at $90,500 with condition of financing, home inspection and permits.

After a proffessional home inspection, we identified more serious issues, and I submitted a new offer of $80,000. As per your advice, I got preapproved for the new offer and put my offer in with no conditions. We settled at $82,000, offer was accepted today.

My real estate agent said the house will be worth $150,000 - $160,000 once renovated, comparable to other homes for sale on the same street, which are selling quickly. I estimate $20,000 for repairs

I plan to rent the house for 3-5 years for $800.00 ++, also has a large detached 2 car garage that could be rented for $150.00 - $200.00 a month. Will cash flow nicely

Real estate in increasing about 5% annually in this area, should show a good return in 3-5 years including the gain from the renovations.

Using a cover letter was a major factor in having this offer accepted $32,.000 below the original listing. Identifying the major issues with the house motivated the vendor to accept my offer.

Thank you all for you support

Mike F

 

[Thomas Beyer]

QUOTE (spike9294 @ Jun 4 2008, 05:54 PM) Sorry,I need to give a little more detail. The house was originaly listed for $114,000, went to $104,000 then $98,000.After my own initial inspection I submitted an offer for $85,500 ( taking repairs into consideration) and we settled at $90,500 with condition of financing, home inspection and permits.

After a proffessional home inspection, we identified more serious issues, and I submitted a new offer of $80,000. As per your advice, I got preapproved for the new offer and put my offer in with no conditions. We settled at $82,000, offer was accepted today.

My real estate agent said the house will be worth $150,000 - $160,000 once renovated, comparable to other homes for sale on the same street, which are selling quickly. I estimate $20,000 for repairs

I plan to rent the house for 3-5 years for $800.00 ++, also has a large detached 2 car garage that could be rented for $150.00 - $200.00 a month. Will cash flow nicely

Real estate in increasing about 5% annually in this area, should show a good return in 3-5 years including the gain from the renovations.

Using a cover letter was a major factor in having this offer accepted $32,.000 below the original listing. Identifying the major issues with the house motivated the vendor to accept my offer.

Thank you all for you support

Mike F

congratulations !! Well done !!

 

[wealthyboomer]

QUOTE (spike9294 @ Jun 4 2008, 05:54 PM) After a proffessional home inspection, we identified more serious issues, and I submitted a new offer of $80,000. As per your advice, I got preapproved for the new offer and put my offer in with no conditions. We settled at $82,000, offer was accepted today.If the buyer cannot get an unconditional written commitment from the bank guaranteeing the funds on completion, I advise them to NOT remove subjects and look for another bank.

 

[Thomas Beyer]

QUOTE (wealthyboomer @ Jun 5 2008, 10:37 PM) If the buyer cannot get an unconditional written commitment from the bank guaranteeing the funds on completion, I advise them to NOT remove subjects and look for another bank.

well, this would be too simplistic an answer ... IF you have been in the game long enough you should know as an experienced investor what is a realistic answer from a bank !!

You can get better terms from a seller with an UNconditional offer .. as many a novice investor or buyer might not get the financing so a seller, especially a motivated seller will go for teh slightly discounted firm offer over one that is conditional on financing !!

Expereince counts again .. as banks have changed the rules again .. and tighten the reign .. so not everyone gets the same huge and cheap cheap mortgage anymore !! It has changed in August 2007 .. and the world looks different since !