Question Details

Danny, Home Buyer in 02189

REO requirement, Cash Only or 203K Loan?

Asked by Danny, 02189 Mon Aug 4, 2008

Through our agent we put in an offer for a REO property at full listing price. We also submitted a pre-approval letter and FICO scores of 750 & 800. We have a 20% down payment for the purchase price. The only contingency was an inspection. Our agent came back and told us the listing agent is only considering cash buyers or someone with a rehab loan (these are not mentioned in the listing). She could not provide any other details or help other then to say the property might not pass appraisal. When we looked at the house we thought it was in good condition with the exception of the furnace and kitchen.

My question, what are our options? Should we pay for an inspection and hope there is nothing serious, pay for an appraisal or we should we just move on?

Thanks

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Answers

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If you are serious about the home I would suggest splitting the cost for the inspection with the seller or even better yet, try getting them to pay for the whole thing. They most likely won't pay for an appraisal but an inspection is not out of the question. I'm actually a lender and you may benefit more from a conventional renovation loan if there is substantial work needed to be done because of your high down payment. A 203K just allows for a smaller down payment and adds more restrictions on items that can be financed for rehabilitation through the loan. Hope this helps...
0 votes Thank Flag Link Tue Sep 9, 2008
I would ask my lender what kinds of issues he thinks the appraiser might raise, and also ask about the possibility of a 203K loan. Next step would be driven by his/her answer. Also, what does your Reaetor say? You DO have one, I hope!
0 votes Thank Flag Link Tue Aug 5, 2008
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