short sale inquiry

Asked by sugasuga2003, 07065 Sun Jul 15, 2012

I am purchasing a short sale in rahway and the regular home inspector that we hired has found a cracked beam and some other issues that I believe will cause us to fail our c/o inspection this week. The deadline for the short sale is Aug 14, and I don't know if lack of c/o will effect our closing. I have heard that FHA mortgage will not allow you to close without one. Are we at a dead end. We do have someone to fix issues but I don't feel comfortable fixing them until I gave the keys in hand

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Marianne, , Rahway, NJ
Mon Jul 16, 2012
The city of Rahway would normally allow a temporary c/o to buyers (you will sign an affidavit stating you will fix the c/o issues within 6 months - $25 fee to the city and it needs to be notarized). A clear c/o will be issued for the bank so long as there are smoke detectors on each level, a carbon monoxide detector near the bedrooms and an ABC rated fire extinguisher mounted within 10 feet of the kitchen.

(I would have your contractor in to see how much it will cost to make these repairs before going much further, you don't want to get a great deal on a home just to turn around and put tons into it).

Good luck!
1 vote
Helene Jeane…, Agent, Metuchen, NJ
Mon Jul 16, 2012
I'm agreeing with Suzanne. A 203k loan will give you the same down payment since it's FHA but will allow you to close and do the work. You'll need professional estimates for repairs to build that into the purchase and for the inspectors to be assured that the work will be done by professionals. Your agent and mortgage broker should be able to guide you.
0 votes
Suzanne MacD…, Agent, Succasunna, NJ
Mon Jul 16, 2012
You should consider switching to an FHA 203K loan. It will allow you to close on the property and do the repairs after closing. Basically you would borrow the money to both purchase the home AND pay for the repairs. FHA will go forward with the loan because they are assured the work will get done in a timely manner. It's a great alternative for folks like you. Talk to your lender, you should have time to switch to the new loan type and still close on time if you get going right away.
0 votes
Pat Marlinski, Agent, Westfield, NJ
Mon Jul 16, 2012
Good Morning,

I would be at that inspection and see what the city identifies as problems. You can probably close with a temporary c/o. Good Luck!

0 votes
Ibrahim Hugh…, Other Pro, UNION, NJ
Sun Jul 15, 2012
Hi. Maybe others can chime in but I don't know a certificate of occupancy to cover foundation issues unless they blatantly affect the habitability of the home. Most of the cracked beams I've come across don't.

What are the "other issues"?

I would ask the co dept what kind of issues do they cover on an inspection.

Good luck.
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