Arghh - need to decide today between cash or mortgage offer (contingent, appraisals)
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Who cares what they do with it after they finance it. If I had a property for years and I could get another 24k by waiting 30 days, I would do it.
I don't think you understand how this works. The issue isn't what the buyer will do with the property after they finance it, the issue is they may never be able to finance it!
The extra 24K won't mean nothing if the place never can get financing and/or close be it 30 days later, 90 days, 365 days......
I don't think you understand how this works. The issue isn't what the buyer will do with the property after they finance it, the issue is they may never be able to finance it
Yes, I get it.
What is a tear down to you and me, is a fixer upper to someone else. Its likely he would just fix it up. Once a saw a guy build a new shell around an existing building, then pull out the inside and rebuild. Technically, it was renovated, not torn down.
What is a tear down to you and me, is a fixer upper to someone else. Its likely he would just fix it up. Once a saw a guy build a new shell around an existing building, then pull out the inside and revuild. Technically, it was renovated, not torn down.
Actually, when you're talking about an offer involving a mortgage, it's up to no one else's opinion than the lender. If the property is truly that distressed, there is no way that the lender will finance it as-is; what that means to the seller is that they might get locked into either major price reductions to accommodate necessary repairs, or spending the $$$ up-front to effect said repairs. Either way, pretty decent chance that $23K difference (still unsure why cash would be given at closing as opposed to reflected in the actual offer price) will go away oretty quickly.
Woo hoo - another builder just came in at $620K. He's my new best friend.
Re tear downs - our town used to be known as the tear down capitol of the nation. It's where teardowns.com originated. It's the expectation, not the exception. Our house is very outdated, very shabby, and has been trying to tear itself down whenever possible. Our location is about as perfect as you can get in this village. The mortgage is looking iffier by the minute - not going to give details, but there are hidden red flags starting to appear. Even though the guy just came up another $3K.
Woo hoo - another builder just came in at $620K. He's my new best friend.
Re tear downs - our town used to be known as the tear down capitol of the nation. It's where teardowns.com originated. It's the expectation, not the exception. Our house is very outdated, very shabby, and has been trying to tear itself down whenever possible. Our location is about as perfect as you can get in this village. The mortgage is looking iffier by the minute - not going to give details, but there are hidden red flags starting to appear. Even though the guy just came up another $3K.
Glad you got another, higher offer! Re: the mortgage offer and the issues now cropping up: that's precisely why you almost always want to take a cash offer, even if for a little less; you're taking a little less in order to ensure some security and certainty of closing the deal. Soooooo many things can derail a loan, it's just not worth the headache if you have other comparable cash offers.
He may have a pre-approval letter, but if the house is in "tear down" condition, the bank will never finance it. Also, when the bank learns that he will be tearing it down, they will also not finance it.
Quote:
Originally Posted by ocngypz
Bank's not going to finance a teardown.
Quote:
Originally Posted by berniekosar19
If the property is truly that distressed, there is no way that the lender will finance it as-is;
What on earth are you people talking about?
Clearly, you guys do not live in a market where teardowns are common. We have at least 100 every year in my small town of 16,000 people. The purchase of the lot gets financed all the time via a construction loan. It's no different than if you needed a loan to buy an empty lot of land and build a house on it.
Quote:
Originally Posted by CatWarmer
Woo hoo - another builder just came in at $620K. He's my new best friend.
Re tear downs - our town used to be known as the tear down capitol of the nation. It's where teardowns.com originated. It's the expectation, not the exception. Our house is very outdated, very shabby, and has been trying to tear itself down whenever possible. Our location is about as perfect as you can get in this village. The mortgage is looking iffier by the minute - not going to give details, but there are hidden red flags starting to appear. Even though the guy just came up another $3K.
Haha! That's so funny because people often claim my town is the teardown capitol of the nation. Typically there's at least happening on every street at any given time. It's truly incredible to watch entire neighborhoods transformed.
Quick question about the original financed offer you mentioned . . . as I read your post it sounded like you were saying the buyer was financing $615K of the purchase and putting $9K down as cash. If that's the case this should have been an absolute no brainer. I would never trust an offer where the buyer was financing 98%+ of the purchase price.
The good news is that you don't have to decide anymore! Congrats on your new offer. Sounds like a winner.
Hey, in 2005 the New York Times said our suburb was "often referred to as the epicenter of the teardown trend." And they're never wrong, right?
$615 (now $619) was the full offer; contract includes 90% mortgage. The $9K is for "certain items of personal property" separate from the house purchase.
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