Gotta admire your persistence! :)
It is going to depend upon your source of financing. Conventional is a little looser than FHA which is a little looser than VA. And, all of them are going to depend upon what the appraiser has to say as far as the livability and safety of the home.
VA is VERY picky, as their charge is to protect the veteran from getting into a bad deal, where the vet is going to end up spending money to fix. They will make you fix chipped paint, broken windows, etc., etc.
FHA's standard is "livable and safe", so they aren't suppose to worry about things like chipped paint, but only those things which could prevent someone from living in it (does it have a stove, toilets, etc.?) and being safe (which is where your wiring and such will come in.)
Conventional financing is the most lenient, but even there Fannie and Freddie lenders are not going to allow code violations, etc., to go un-corrected if pointed out by the appraiser. In other words, is the appraiser going to give you an OK with an "as-is" appraisal or come back with a "subject-to" appraisal. One never really knows until you have the appraisal in hand.
If these things can't be handled prior to closing, your best bet if you wish to proceed is to get a private-money loan, fix the place up, then go to permanent financing with the "market rate" type lenders discussed above.
As it just so happens :), Legacy Group provides both types of financing just for this particular situation. Give me a call.
Bill Parker, Loan Officer
AZ Lic# 09011570
CPA--Licensed, no longer practicing
Legacy Group Lending, Inc.
15333 N. Pima Road, Suite 300
Scottsdale, AZ 85260
(O) 480-993-3080; (M) 602-565-3646; (F) 480-993-3081
MISSION STATEMENT: To create an unbelievably enjoyable experience for my clients, while guiding them through the most important financial transactions of their personal lives. My clients know me as their Mortgage Lender for Life. I truly appreciate your referrals.
If you think it's expensive to hire a professional to do the job, wait until you hire an amateur.
Red Adair, Oil well firefighter
MLS# 4611932. This property is a classic no no investment. Looks like a killer bargain right? There was another one for sale for $42K 6 months ago same floor plan. I was very interested in this property and went to work buying it. But here is the problem if you purchased the place. There is no CO. This place is a 4 building attached unfinished townhouse with existing inspections to be complete. Not only would you have to complete all the inspections through City of Phoenix for this property, you would have to compete the other 3 townhouses that are attached. Fire hazard. If you decide to work on the property anyway SRP electric will not turn on power. Also City of Phoenix will not turn on water or sewer. So you would have to spend all this money doing work on the other 3 townhouses to get inspected when you donâ€™t even own them. City of Phoenix fire dept would inspect the sprinkler system and need inspection and so on. Problems galore.
So go ahead and buy the house you want so badly. Go for it. And one last thing. You keep mentioning â€œnon-profit.â€ No such thing as work for free. Thereâ€™s always a profit with a contractor.
Being almost ready to bail anyway, it didn't take too much of his attitude to get me to take my agent aside to let him know that we were done ... now. Offer off the table.
The good news is that later today we were able to re-offer on another house (that we like better anyway), one we had earlier lost to a higher offer by someone whose financing apparently later fell through (as it just came back on the market).
I wanted to let you kind respondents know that your advice was of significant help in this matter. My thanks and best wishes to you all.
Usually non profits are good about having important issues up to current code. A rule of thumb is: building that is not permitted or out of compliance, is poor work. You will ultimately be responsible for that. IF you are a tradesperson in one of those fields, you might be able to correct the issues, but if you are not the burden of uncovering and correction will be on you . Personally, I wouldn't want to have that pressure and would be looking at other homes.
Hereâ€™s a good tip. RUN!
My offer was based on FHA financing. I am VA qualified, but I know this one won't wash for that.
Again, I'm just trying to get a better feel for the horse trading that will inevitably transpire at the meeting. Knowing what the seller simply has to do anyway in order to make the sale legal (safety concerns, e.g.,) would seem to give me a leg up in the negotiations, hence my wish for a kind of handy checklist.
Thanks for the responses.