GSH Oceanfront Office
From what I understand in Virginia they want to get rid of a lot of these gift downpayment programs for that exact reason. I'd love to see the stats on who defaulted that used one of these programs.
I deal on the creative side as an investor. Sometimes I ask for the seller to take back a second mortgage, owner finance the property for me, let me take over their loan, 10 - $50,000 off the price they want. It just all depends on the situation on whether they accept it or not. But of course it's not a home I'd live in so if they say no, I just move on to the next property, it's got to make sense for me. So I can get a bit more bold in my requests.
Depending on the above factors, I might ask for Settlement expenses & Prepaids to be paid up to a cap of 3% or 3.5% depending on the good faith estimate provided by the Buyer's Lender and other calculations. I may ask for a One Year Home Warranty activated on the date of Settlement, HVAC Serviced if not done within a year (You can ask for this at the Home Inspection - but I prefer not to have to negotiate that later and just ask upfront - you will find Seller's are more willing to negotiate up front than later), popular FHA Down Payment assistance program's such as the Ameri-Dream or Nehemiah Program (Ensure you know how to word this in the contract), home inspections and other applicable inspections and possibly condo fees x ? mos. Another thing is I do is look at things like windows and doors that may be damaged and ask for those to be replaced under property condition, and adequate insulation in the attic (ex. R22 - always check the attic!). Many homes are sold with windows that have broken seals and are fogged. This can be negotiated in the home inspection, but does not have to be granted unless the appraiser writes it in the report and the lender refuses the loan unless they are replaced or repaired. So, I just check it in advance.
I think it is great that you are asking these questions. Find yourself a savvy Realtor that you can go to when needed. Also, very important rule when listing condos, document in the MLS the tenant to owner occupany ratio, and when representing a Buyer for a condo, be sure to get that information prior to writing an offer if you can and definitely before ratifying an offer. Find out what the Lender's stipulations are and make it a contigency. It will save you time and added expenses.
You can email me anytime for additional questions.
All the best, Rebecca
I recently submitted an offer for a client on a decent townhome in VB for $171,000, and asked for $3,000 in seller concessions with a home inspection. The seller is also installing a new roof, and new windows were also recently installed. Got that offer accepted without much problem.
However, up on the peninsula in Hampton, and against my advice, I had another client ask for $4,500 in seller concessions on a $145,000 condo in great shape - and they lost it to another buyer asking for just $1,500 in concessions.
In our local market, what we can ask for on behalf of our client depends on a lot, as each property is so uniquely different. I work with a lot of condos and townhomes priced below $225,000, so that market is entirely different than a SFR in the $300,000 price range.
Frank Biganski, Realtor ABR