Joy, Home Buyer in White Settlement, TX

Good day, you say that repairs are needed on this property. Can you elaborate on that please? Thanks you.

Asked by Joy, White Settlement, TX Sun Jun 26, 2011

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Thank you both for your comments and your help.
0 votes Thank Flag Link Sun Jun 26, 2011
Built in 1955, the old house might have a lot of things that need attention. Anything from plumbing, electrical, and roof to foundation. We just don't know. Brian is right that repairs on pre-foreclosure homes are not usually paid for by the seller or by the bank.

However, the buyer's bank could fund repairs in an escrow account based on a loan for a higher amount. This type of loan is called a 203(k) under FHA, when the repairs are larger than $5,000. They can allow up to $35,000 in repairs. Not many banks like these loans because they are more work for them and the fees are higher.

Conventional lenders can offer a renovation loan, which is similar to the 203(k) type. Before you decide to make an offer, check with your lender and confirm that they do offer these loans. The loan amount is for more than you're buying the house for and the money for repairs are held in a repair escrow account. After closing as the repairs are completed, the invoices are paid from the escrow account, and an inspection is normally required by the bank to assure compliance.

Before you do anything, find a lender you can work with, then visit the home to see what all is apparent that needs fixing. Then get an inspector or contractor to go with you to gauge the amount of money needed. Small repairs under $5,000 can be rolled into a 203(b) loan, unless the repairs affect the structural integrity of the house or otherwise make the house not suitable for occupancy.
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0 votes Thank Flag Link Sun Jun 26, 2011
The MLS does not have much additional information about the property. It is a short sale and it is priced for the repairs needed according to the listing agent. As a short sale, the bank is usually not going to pay for repairs, and it is doubtful that the owner will do any repairs prior to closing. Depending on the nature of repairs needed, a bank may not finance the property and you may have to pay cash for the home.

There is very little that you can get off of pictures. The best way to evaluate a home is to see it in person. If you would like to take a look at this property, let me know. If you have a real estate agent, then you should ask him/her these questions and set up a viewing if you are interested.

Hope that helps,

It's more than real estate. It's RAYL-Estate!

Brian Rayl
Keller Williams Elite
0 votes Thank Flag Link Sun Jun 26, 2011
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