Laura Hill, Home Buyer in Bay Harbor Islands, FL

Frustrated by all the roadblocks on the houses that are for sale.

Asked by Laura Hill, Bay Harbor Islands, FL Mon Aug 30, 2010

My husband and I are looking for a house to buy. We have found many properties that we woudl be interested in, however, they all seem to have problems preventing them from being available to us. The problems we have encountered have been that they are cash only, that the don't qualify for FHA loans, that the sale price is way more than the appraisal or they have some defect like bad roof, etc that takes them out of the FHA loan. We have also had a hard time finding a realtor that will locate properties for us to look at that reflect our needs. I really need someone who will listen to what we are looking for, and help us find it. I am very frustrated and feel like I need some help. Our financing is lined up-just need someone who will help me find the property.

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Hi Laura,

I am a 203K Rehab Specialist located here in Florida. I do loans all over Florida and used to live in South Florida and work in Bay Harbor Islands many moons ago and still visit as much as I can.

As the previous writer mentioned, a 203k loan can help you overcome the obstacles you are facing in this competitive homebuying market. It is my opinion that too many realtors, and investors alike, immediately dismiss offers from buyers who elect to use FHA financing because they think the property will not qualify for an FHA loan.

The 203k Rehab loan was specifically created for buyers that want to purchase fixer uppers but may not have the cash on hand to do the repairs. This loan offers buyers the best of both worlds - low down payment, great rates and since the cost of the repairs and purchase price are combined into one loan , you only have one monthly payment.

There are two versions of the 203K - Streamline which is used for less extensive repairs up to $35,000 and the Standard - which can cover additions and major renovations over $5000. The max limit is determined by the estimated future value of the property once the repairs are done. You can use the 203k to do as little as purchase appliances to replace a roof, AC and even fix an existing pool.

My company also offers the following 203k refinance option. If you purchase the property for cash, you may be able to refinance the property within 6 months of purchase to cover the repairs and possible recoup some of your acquisition costs.

Since the 203K product is not well known, I encourage my buyers and their realtors to contact "cash only" lisitings and talk to the Agent/Rep. Sometimes, they're receptive - at that time, I'll give them a call to educate them about the product and usually they'll consider the buyer's offer.

We are one of the largest 203K servicers in the country and largest in Florida. I've closed countless 203K's and would appreciate the opportunity to help you purchase your next home.

Please feel free to contact me and review some of blogs and other responses re the FHA 203k loan.

Hope this helped.

Sincerely,
JACQUELINE CLARKE
FHA 203K Specialist
Freedom Mortgage
1600 East Robinson Street
Orlando, FL
Cell: 407-591-7693
1 vote Thank Flag Link Tue Aug 31, 2010
Each time I read a situation like yours it frustrates me to think that professionals who actually work in this business do not do their job. I pride my self in the service I provide and It's not an easy business to match up with buyers and sellers and there are so many who don't take their job seriously. That being said I needed to sell a house in NC where I do not hold a license and after many failed attempts at trying to locate a Realtor who would "work" for me I contacted the Broker in charge at a reputable company and asked who was full time and took their job seriously? Very often they can put you in touch with someone they have failth in and know will do the work. I wish you all the luck and if you ever decide to move to the Cape I'm here to help.
1 vote Thank Flag Link Tue Aug 31, 2010
Be very careful with the "we buy homes" type of investor sellers. They may not be looking out for your best interest and you may end up buying a "pig in a poke".

The majority of the "we buy homes" houses are also listed on the Realtor MLS system and your agent who will look out for your interests will be compensated by the investors. Find a well experienced Realtor to help you--there is no cost to you!

I repeat, DO NOT go it alone.

Now, about your mortgage... contact Wells Fargo and get approval for an FHA 203K S "streamline" fixer upper mortgage. It will allow you to buy a home that needs a new roof because the cost of the roof will get included with your mortgage. After you close, the roof will go on (and new carpeting and any other non-structural repairs you want, i.e. appliances, fresh paint inside and out). Your total fixup costs cannot go over $35k and you can't have "structural" type repairs. Many mortgage brokers and lenders do not even do the FHA 203K Streamline but Wells Fargo does so if your lender cannot do it, then go directly to Wells Fargo. I cannot recommend Bank of America.

Also on Short Sales, sometimes there is fraud that requires the buyer to have ALL CASH because the house is truly already under contract with an insider investor who wants to "flip" the house to you. Many lenders do not want to see a same-day flip.

Make sure your FHA approval letter from Wells Fargo says you are approved for a 203K Streamline mortgage. That way you can compete with ALL CASH buyers on bank owned REO properties. REO Asset Managers do not want to waste time with an FHA if there is fear the house condition will prevent a regular FHA mortgage.

Hope this helps!
1 vote Thank Flag Link Tue Aug 31, 2010
Hi Laura,

No need to worry about the property not qualifying for a normal FHA loan, called the FHA 203(b). You can always use an FHA 203(k) to buy the home in its current condition and complete the repairs AFTER you own the home by including in your mortgage the cost of the repairs/improvements. Visit this site below for more details or you can always contact at 203k Contractor advisor at (480) 463-4663.

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203kContractors.com®
Contractor Directory for the FHA 203(k) Program
(480) 463-4663
Web Reference: http://203kContractors.com
0 votes Thank Flag Link Tue Aug 31, 2010
Here's another option: you could also contact some of the "We Buy Houses" folks in your area to see if they have any properties in their inventory that they're willing to sell to you with FHA or seller financing.
0 votes Thank Flag Link Tue Aug 31, 2010
Laura you really need to find an agent who specializes in buyer brokerage in your area, they can check the houses on your behalf to see if they are abloe to pass a fha inspection be a a potential fit to you. Let them do the work for you.

you can usually do so at no cost to you, they get paid their commission from the fee advertsised in MLS by the listing agent and paid at closing. This way they can get the information for you and you will have someone assisting you through each step of the buying process.

Good Luck with your search
0 votes Thank Flag Link Tue Aug 31, 2010
Laura,

Don't worry you guys will find something really fast. There is always new inventory coming on the market. Yes, its true FHA financing prevents homes that need some repairs. I've seen them in my area too where I have FHA buyers but I can't show them the home because of the condition.

Just like the other agent said, find a pro in the area and I'm sure they will help you out.

Good Luck
0 votes Thank Flag Link Mon Aug 30, 2010
Hi Laura,

Unfortunately your road blocks are the same that many FHA buyers are seeing in this market. Your best bet would be to contact a local Realtor in your area that is primarily a buyers agent and knows how to write offers the right way when locating properties that will work for your type of loan. Type in your city in the box above, then click on the find a pro tab. Interview at least three buyers agents and see who is the best fit.

Good Luck too you!

Chris Blasic
0 votes Thank Flag Link Mon Aug 30, 2010
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