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Hello,
We Made an offer on a foreclosure but had to step up the offer as there was another offer on the table. The bank accepted ours but we have maxed out on our budget. We knew we had to redO the kitchen and that we were prepared for. We had an inspection done and found a few issues with the house:
The roof was not in good shape - the flat roof was the asphalt roll roofing material , apparently a cheap roof type prone to leaks. The pitched roof was also patched with repairs. There are a couple of cracks on the ceiling and the inspector seems to think it could be the roof problem with leaks. Bottom line - we may have to redo the roof. How much $$$ are we talking about?
The house has a lot of glass in it - nice for sunlight but many of the glass doors are not tempered and more importantly, the seal is shot in most of the insulated glass and condensation has begun to set in. This also includes a sunroom with curved glass- almost every glass seal is shot. Is there a warranty on sunrooms and how expensive is it to replace the rest of the glass around the house , with glass or maybe walls? There is too much glass and some can be done away with and drywalled.
There are two new oil tanks and the inspector wants us to make sure that the old tank has been removed from the property without contamination. Being a foreclosure, such information is not forthcoming. Where can we start?
The water was turned off, so no (private) septic inspection was done. We assume that definitely, we need to have one done. Does anybody know what best can be done for a foreclosed property.
Other than this, the carpet has to be changed and few other things need to be fixed. It is well beyond our budget at this point. Is it worth while going back to the bank with lower offer or is that a futile endeavor?
Any other pointers to keep in mind as this is our first venture into foreclosures? I greatly appreciate any help.
What is your goal? Keep the property or get out of the contract?
In a foreclosure, typically the bank won't do anything. Basically if you buy it you are on your own. You buy it, you fix it. Buying at the top of your budget and buying a fixer upper doesn't sound like a good idea for you.
Estimates to fix the place depend entirely on the house. There is no one price shopping for new roofs. Call a roofer, get a quote. Might be $2k, might be $15k, depends on the roof and what needs to be done. They may need to tear the wood off the roof too. They may need to replace the roof beams due to rot and cannot nail to anything. The possibilities are endless.
The window seal issue may be under some warranty, but don't count on it. It's possible they may not honor the warranty based on the fact the house was empty, unmaintained, and unheated, etc. If the roof was leaking and the house shifted, it's not an issue with the windows, its the building. So count on being denied. My experience with building material warranties is "they are useless" as most of the cost is labor. They typically only cover the material. 10 roofing shingles go bad? Here is 10 replacement shingles, install em yourself. The paint didn't hold up for 10 years, here is a replacement bucket of $10 paint, do it yourself.
We do like the house but yes, with the current scenario, where we think we might have to redo the roof and windows, doors and the kitchen, it seems out of reach. We are trying to work out the $$$ amount and see if we can go back to the bank but of course, chances are slim that the bank will be willing to negotiate.
That's not very heartening news with regards to the warranty. We are trying to reach four seasons with regards to the sunroom but they are not forthcoming or helpful so far as we don't own the property.
Is it cheaper to replace the glass and dry wall it in some other parts of the house. Like i said, too much glass. Also, by putting new glass, the problem with the seals can recur. Thanks,
Is it cheaper to replace the glass and dry wall it in some other parts of the house. Like i said, too much glass. Also, by putting new glass, the problem with the seals can recur. Thanks,
Sure that is cheaper.
Personally, I would remove it from the house, then take the glass and make a greenhouse somewhere else on the property. The plants dont care if the seals are broken and there is moisture between the panes.
When I'm dealing with foreclosures, I tell buyers that they have to really think about whether a foreclosure will work for them in the long run (financially). Sometimes the things an inspector finds are not all inclusive. There may be things that pop up after you move in that weren't something the inspector could have known about. I don't want to go so far as to say that foreclosures are a money pit, but I do think you need to have some good cash reserves to deal with unexpected problems. My experience has been that most foreclosures have been neglected for some time and it creates a good amount of deferred maintenance.
So to answer your question,yes you can go back and say that based on inspection, you will only offer x. I have success about 50% of the time. Sometimes banks don't do business in reality. They will price a property a certain way because they have known defects and it is what it is. Unfortunately, sometimes they can price a property not knowing a particular defect and still not be willing to budget.. but it's worth a shot.
And yes, you definitely should figure out a way to get the septic inspected.
Will your lender fund the house in it's current condition or will they require repairs to be made prior to closing?
When I'm dealing with foreclosures, I tell buyers that they have to really think about whether a foreclosure will work for them in the long run (financially). Sometimes the things an inspector finds are not all inclusive. There may be things that pop up after you move in that weren't something the inspector could have known about. I don't want to go so far as to say that foreclosures are a money pit, but I do think you need to have some good cash reserves to deal with unexpected problems. My experience has been that most foreclosures have been neglected for some time and it creates a good amount of deferred maintenance.
So to answer your question,yes you can go back and say that based on inspection, you will only offer x. I have success about 50% of the time. Sometimes banks don't do business in reality. They will price a property a certain way because they have known defects and it is what it is. Unfortunately, sometimes they can price a property not knowing a particular defect and still not be willing to budget.. but it's worth a shot.
And yes, you definitely should figure out a way to get the septic inspected.
Will your lender fund the house in it's current condition or will they require repairs to be made prior to closing?
Will have to check about the lender funding - I am not familiar with repairs prior to closing. any details on how that works? thank you
We had an update on the removal of the old oil tank. The tank was removed in 1998 and a soil sample collected then. It had 295 ppm which the fire Marshall says is acceptable under state laws. Even so, it is contamination. Is this normal or something to be concerned about. He has a record of the value. Will this record suffice as a 'clean bill of health' with regards to the contamination. I tried reaching out to the company that did the sampling but the owner died and I couldn't get anywhere. Also, how reliable is this test. It was a single sample collected then. Should we redo the sampling?
"The roof surface was walked on for inspection.There are two different types of roofing present. The flat roof section hasbeen covered with an Asphalt roll roofing material that is presently inacceptable condition. However, this type of roofing material is not recommendedfor flat roof installations. It is an inexpensive roof covering with arelatively short design life and prone to developing leaks. The pitched sectionof roof is covered with a built up Asphalt and Asphalt impregnated roofingpaper. This roof is old and has had repairs in the past. These roof coverings willneed constant maintenance to keep them watertight until eventually they getresurfaced. There are presently two roof leaks at the right side overhangs thatneed repair. You can expect some decay at these locations
I recommend rain gutters and rain leaders beinstalled at the pitched roof edge. This will help to eliminate the moisturecondition that exist in the basement and helps to prevent water seepage intothe lower level.
Ceiling damage in the rearright bedroom and living room may be from a past or present roof."
the ceiling damage referred to is a few cracks that are visible.
Being a foreclosure, we have no idea if at any time the roof was replaced. checked with the building dept but no permits. so, we can assume that it is the original roof (1963).
should we call a roofing company and get it evaluated or can we assume it needs to be re done. the roofing company charges 400$ for coming in for a evaluation and estimation with the caveat that there may be 'additional work' once they remove the roof - the plywood etc may need to replaced. will the roofing company be able to check and address the cause of the cracks in the bedroom and living room ? Not sure if it makes sense to drown another 400$ to get it evaluated or is there a better (cheaper) way of getting it examined and to know how much a new roof would cost if need be?
All these inspections are done and cost money but there is plenty that they 'can't do' - he did not do much about the furnace - I looked for the date of installation (1990). he did not do the AC (too cold), nothing about the plumbing and water heater ( bank turned off the water) or the septic(no water).
Have you talked to your loan officer about the leaking roof? Depending on the loan you were approved for, this could be a deal breaker and you will be denied a loan.
Typically with REO's you can't fix the roof before you buy it and the bank won't fix the roof. So if you cant afford another type of loan, this deal is dead. You should talk to your loan officer before spending any more money.
Last edited by 399083453; 11-20-2013 at 10:20 AM..
Really depends on "you" Everything you listed I can fix myself for hundreds of dollars in materials. But if you have to hire contractors, it could cost you tens of thousands. There is no limit.
So what may be a deal for me, could be bankruptcy for you. Also "fixed" means different things to different people. One person may put a $5 blue tarp on the roof for 3 years and call it fixed. Another person might tear off the entire roof, rotted beams, etc for $35k
At the end of the day, its really up to you. No one here has seen the house or knows your finances.
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