REO With Mold In Basement
I found a reo with severe mold in the basement. The water came from the fact that the sump pump was off (no electricity). The water got pumped out last week but there is mold on the floor joists, some of the concrete walls, and really bad on the studs encasing the stairway. The water also looks like it ruined the water heater and furnace.
Add to that the pool that hasn't been touched in two years and you have a lot of work needed.
Here's my questions....
If the bank is consitering this house "As-is", how do I figure out what a fair price is? They haven't set a price on the home yet but the realtor said it would be between 250-300. The house across the street (no pool) just sold for 350.
Assuming there might be upwards of 50K in repair, what should one expect to be a decept offer? The mold is scaring me and most likly other customers away.
Help!
My best friend just went through this same situation a couple of weeks ago. The bank had it listed for $165,000.00. She got the house for $72,000.00. In her case the addition was completely "moldy" I got sick when I went in. It looked like a movie scene.
Lori
[addsig]
OK. The realtor just set the price.... 325000! Are they nuts???
You cant check the plumbing because the sewage pipe in the basement is missing a section. You cant check the furnace because there is mold in the basement and it would spread. You can't test the pool without draining it. And the house across the street just sold for 350? I dont get it...
SO... now what? still make an offer? at 250? Oh and one more thing, lets say the house needs 50K in repair... can I make an offer for 300K asking that I get 50K back at closing for repairs? Again, an as-is home.
Help.
My friend bought hers AS IS, with cash. The only loan I could her, with as much mold in that house was a HML. So she paid cash.
You can offer whatever you want. I have never seen anyone get any money back for repairs from HUD or a REO
Lori
[addsig]
Go to the home and take many pictures, show how bad it is. Also get as high of repair estimates as you can. Send in all that information along with your offer. Use whatever information you can to support your low offer. I would recommend writing on the actual purchase agreement something along the lines of see pages 1 through X of exhibit A or something just to make sure the realtor submits the entire package to them. Realtors like to price things high because they make more.
GOOD LUCK
absolutely offer whatever you want. if you're offer is substantially lower than they're asking price, get a contractor's estimate for the work and submit it with your offer. sometimes stuff like this takes a little proposal to back up your claims of what the place is worth.
build a nice case and you could be ok. good luck!
:-D
OK this sounds good. Even though it is an "as-is" home, you all think I can still make an offer with evidence of the necessary repairs and that will help? I'm just afraid the banks going to be like "its as is, i dont care about the necessary repairs". I just cant see the house being worth 325 in its current state at all.
I am getting estimates for the repairs as we speak. My greatest concern is the mold, and the things that can't be found (such as broken pipes) before taking ownership and getting the basics up and running.
As for the financing part, I am also thinking of getting a line of credit on my current home, and using that to repair this one, though the line of credit I can get might not be enought.
Are there other loan types? like something that will cover the 250 for the house and then give me another loan like a second mortgage or rehab or somehting that covers the repairs, knowing that with the repairs done the house will be worth X?
Whats an HML?
Quote:
On 2004-05-07 11:01, tinman1755 wrote:
My friend bought hers AS IS, with cash. The only loan I could her, with as much mold in that house was a HML. So she paid cash.
You can offer whatever you want. I have never seen anyone get any money back for repairs from HUD or a REO
Lori
Ask your lender about a "Construction/Rehab Mortgage." Those will allow you to purchase and rehab. However, they typically limit the total loan to 70-80% of the ARV (after repair value).
When banks say "as is," they generally mean they will not assume any responsibility for repairs. You can still offer what you want.
The rehabb loans go up to 90% LTV, nationwide.
HML= Hard Money Loan.
If you want the house just make an offer. They will say yes, no, or counter
Lori
[addsig]
sounds good! I'll ask the banks about these loans. I also read something about a 403K program??? Are they bound by the limits of a traditional FHA loan?
I'm new here. I just a have question for you. What are your plans after you fixed it? I hope your not flipping this property. Let's say you will get this property at $250,000., plus repair of $50,000., plus closing cost of $1500., that's $301,500., already. And i think there are two or more expenses that you have to consider. 1. How long would the repair take? "monthly mortgage" 2. Are going to list it "what %?" 3. ?. ...got to go now
OK, I just got some estimates in. 25K for mold removal, 8200 for carpet, 7000 for the pool.... we are sitting at 40000 so far for damages, without talking about the broken pipe, water damage, etc. We'll hit 55K without blinking...
what would your limit be to the offer price? remember, neighborhood home sold for 350K last week.
Quote:
On 2004-05-07 16:13, peccatrice wrote:
OK, I just got some estimates in. 25K for mold removal, 8200 for carpet, 7000 for the pool.... we are sitting at 40000 so far for damages, without talking about the broken pipe, water damage, etc. We'll hit 55K without blinking...
what would your limit be to the offer price? remember, neighborhood home sold for 350K last week.
With the numbers that you have provided I would not make an offer. An offer price can not be determined until you know the cost of doing business.
When you know how much the rehab will cost, how long it will take, type of financing you will need and normal days on the market then we can start to work up an offer price.
Time is money every day you are rehabing cost you money.
Every day the house sits on the market cost you money.
How much money is determined buy your terms on the money. [ Edited by lacashman on Date 05/07/2004 ]
Quote:
On 2004-05-07 19:26, lacashman wrote:
Quote:
On 2004-05-07 16:13, peccatrice wrote:
OK, I just got some estimates in. 25K for mold removal, 8200 for carpet, 7000 for the pool.... we are sitting at 40000 so far for damages, without talking about the broken pipe, water damage, etc. We'll hit 55K without blinking...
what would your limit be to the offer price? remember, neighborhood home sold for 350K last week.
With the numbers that you have provided I would not make an offer. An offer price can not be determined until you know the cost of doing business.
When you know how much the rehab will cost, how long it will take, type of financing you will need and normal days on the market then we can start to work up an offer price.
Time is money every day you are rehabing cost you money.
Every day the house sits on the market cost you money.
How much money is determined buy your terms on the money.
<font size=-1>[ Edited by lacashman on Date 05/07/2004 ]</font>
ok so to answer your questions:
"When you know how much the rehab will cost,
60K
how long it will take,
6 weeks
type of financing you will need
im looking at a home improvement contract (construction)
and normal days on the market then we can start to work up an offer price. "
House across the street was on market, from the time listed to closing, 2.5 months