Home Buying in New York>Question Details

Nicole Holt, Real Estate Pro in ,

I am interested in buying a REO property. Does anyone know how long the process will take and how do I go about getting a 203K mortgage?

Asked by Nicole Holt, , Thu Jun 2, 2011

I found a home that is on a bidding site and I viewed it and saw great potential. The only problem is it needs a lot of work. I did see leaks and it needs some repairing of the walls and flooring. Is it better to buy a fixer upper for a low price or just buy something I can move right in?

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There are many variables regarding this. Just to touch on a few....Sometimes you may benefit from buying fixer-uppers but in today's market you are able to get exceptional deals, so I'd personally choose to move straight in without the stress and anxiety of the repairs to be made.

Also, you would need to make sure all permits for the repairs are applied for in a timely fashion (costs money), all contractors are licensed & insured, etc..Fixer-uppers can cost you more money and time in the long run....however, it can provide "family time" by choosing to do it all yourself if you have that kind of spare time.
0 votes Thank Flag Link Thu Jun 2, 2011
No one can tell you how long it would take to get your offer accepted by the bank that owns the property since each bank works differently. I do 203K mortgages. With 203K you need to hire a consultant that is HUD approved to inspect the house and tell you what you need to do and how much it will cost. The appraisal is done 2 ways:
as is
after repairs
This safeguards you to know if it is with the money to do repairs. The time frame on repairs is hard to figure out in advance since some of the repairs may require permits from the City and inspections.
0 votes Thank Flag Link Thu Jun 2, 2011
Be aware that a mortgage pre-approval letter is required in order to determine your price range and for any offers to be taken seriously; therefore do visit with any qualified loan officer before continuing your search; thereafter work with an agent of your own, he/she will be your best guide....
0 votes Thank Flag Link Thu Jun 2, 2011
Curious that you identify yourself as "agent" but are asking a buyer's question. Anyway... I hear a lot of buyers expressing interest in short sales, REO's and foreclosures, thinking you're going to get a great deal. Maybe, but maybe not. I just wrote a blog post about this.


If you are a first-time buyer, don't know much about home ownership, don't have much money, or time, then buying a fixer upper may not be the best way to go. But if you've owned a home before, have money to put into it, have time, etc. then go for it. A 203K mortgage is an excellent way to go, but not all lenders offer them. You'll have to find one in your area. Ask around.
0 votes Thank Flag Link Thu Jun 2, 2011
Nicole before bidding you should and need to get prequailified, let the loan officer educate you on the 203k mortgage and its requirements, Having an agent well experienced in reo home and fha 203k sure will help. Buying a reo can take as alittle as a week or up to 2 months, the 203k throws a wrench in where it could be 6-8 weeks, it is a long process and you will need expereinced guidance for your loan officer to make sure you meet all their guidelines.


Please see my blog for tips and advice in buying bank owned homes
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Thu Jun 2, 2011
The best advice I can give you is to find a local realtor who is familiar with purchasing REO properties to work with. These deals can go quickly or they can drag on but if you have the right team working for you it will go a long way toward moving things along. You can find out about 203k loans at http://www.rebuildusa.com. There you will find just about all the resources you need. I work with a very good 203k lender here in NJ, I can have him refer you to someone if you'd like.

In my opinion, if you don't mind the work, buy the fixer upper. You will have far less competition and generally get a very good deal that way. I used a 203k loan to buy my house and I have never regretted it.
0 votes Thank Flag Link Thu Jun 2, 2011
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