Question Details

K8pdx, Home Buyer in Portland, OR

Short sale has repairs needed in order for buyer to obtain financing, but seller cannot afford repairs. Options?

Asked by K8pdx, Portland, OR Wed Feb 23, 2011

There is a fixer-upper in a great location for us, but since we wouldn't be selling our current home until we have the new one fixed up, we don't have enough cash to cover the full price. We do have enough cash to cover 20% down, closing costs and some of the needed repairs, plus we have enough equity in our current home to cover the balance of the loan we would need. The problem is that some of the repairs are the significant enough that most banks would want them done pre-closing, and the seller doesn't have the money to do it. What are our options?

Help the community by answering this question:

Answers

3
You need to check out getting a FHA 203k loan, since all the repairs will be included in the mortgage. Only certain lenders offer the 203k.
For more information go to:
http://www.rebuildusa.com/
0 votes Thank Flag Link Wed Feb 23, 2011
K8pdx,
You need a rehab loan. Banks will actually finance the repairs in your new loan. The home is appraised as if the work were done; you can put down as little as 3.5% of the finished value. You need to arrange for bids from licensed contractors in advance, they will be paid upon completion of the work after it closes.
Ask your lender for an FHA 203k or other rehab loan.
0 votes Thank Flag Link Wed Feb 23, 2011
Depends on the repairs, risk, costs - buyer has the option to fix with sellers permission.
0 votes Thank Flag Link Wed Feb 23, 2011
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2015 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer