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Old 10-15-2014, 03:03 PM
 
13,098 posts, read 20,801,082 times
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Quote:
Originally Posted by 399083453 View Post
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......
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Old 10-15-2014, 04:15 PM
 
4,676 posts, read 9,953,139 times
Reputation: 4908
Bank's not going to finance a teardown.

Take the money.........and run.
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Old 10-15-2014, 05:04 PM
 
Location: NYC
16,061 posts, read 26,674,586 times
Reputation: 24848
Cash offer!
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Old 10-15-2014, 05:13 PM
 
4,567 posts, read 10,615,628 times
Reputation: 6725
Quote:
Originally Posted by Rabrrita View Post
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.
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Old 10-15-2014, 05:14 PM
 
4,567 posts, read 10,615,628 times
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Quote:
Originally Posted by CatWarmer View Post
$602K cash vs $616K mortgage plus $9000 cash.
Since your talking about property in the $600k range, just take the cash offer. In my mind I thought you were talking about property in the 50k range.
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Old 10-15-2014, 05:17 PM
 
988 posts, read 1,733,603 times
Reputation: 1078
Quote:
Originally Posted by 399083453 View Post
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 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.

No-brainer: take the cash offer and run
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Old 10-15-2014, 05:43 PM
 
440 posts, read 527,917 times
Reputation: 640
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.
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Old 10-15-2014, 05:53 PM
 
988 posts, read 1,733,603 times
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Quote:
Originally Posted by CatWarmer View Post
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.
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Old 10-15-2014, 06:32 PM
 
Location: Needham, MA
8,530 posts, read 13,937,809 times
Reputation: 7913
Quote:
Originally Posted by coastal chic View Post
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 View Post
Bank's not going to finance a teardown.
Quote:
Originally Posted by berniekosar19 View Post
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 View Post
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.
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Old 10-15-2014, 06:57 PM
 
440 posts, read 527,917 times
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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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