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Old 03-31-2017, 02:19 AM
 
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I was told once that all listed properties on homepath.com are fannie mae properties and are usually needing of repairs and or full rehab. Is this always true?

I saw some fannie mae houses online that look good enough to move in. There's no note of any issues.
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Old 03-31-2017, 06:33 AM
 
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I do not have first hand experience but can all properties be same and needing a full rehab. I have seen a few on the web, going by the pictures some look in very good condition only needing cosmetics. Without a thorough inspection no one can say exactly what needs to be done.
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Old 03-31-2017, 06:34 AM
 
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The previous owner has taken a mortgage loan from Fannie Mae and defaulted. That's why the property is offered by the agency. Same as any bank that forecloses. It can be because the house is not habitable and the borrower has run out of money while paying contractors to rehab it. But it can be for any other reason, including ones that have nothing to do with the condition of the house.
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Old 03-31-2017, 07:56 AM
 
Location: Phoenix AZ
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Homepath homes are *supposed* to have a "property condition report" on file, which is kinda similar to a very *basic* home inspection. Those homes are sold without any disclosure, beyond that report - and the reports are not always posted by the listing agent. Fannie doesn't have any way to know if the foreclosee had independent financial problems, or if they realized at some point after moving in that there were hidden defects that would cost more than the value of the home to repair.

Further, they do sometimes make "repairs" to homepath homes without disclosing them. I put repairs in quotes, because I saw one homepath home that the water heater had been stolen from, where the "repair" was just reconnecting the "hot pipe" to the "cold pipe" so water wouldn't shoot out (but the buyer wouldn't have any hot water). The same house had an undisclosed roof leak (and lots of other "gotchas" that a first-time homebuyer might not notice until they tried to move in.


There's nothing inherently wrong with homepath homes, but if you use homepath financing, you don't get an appraisal that checks for habitability like you do with FHA, so an inspection is a super-good idea. (Though they seem to be trying to discourage that with their buying process).

The only thing that really struck me as patently unfair about buying a homepath home was the mandatory "lock changing" fee they spring on you at closing. You're forced to pay a couple hundred bucks for a mandatory "re key" & you'll get $6.99 locksets.
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Old 03-31-2017, 08:11 AM
 
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There are MANY very nice, ready to move in homes that are available through HomePath and the whole idea is that those that are in good shape are offered FIRST to folks that will live in them as opposed to investors or flippers. Of course you need to get inspection and determine if anything is "hidden" that might blow your budget but that is the same for HomePath as ANY OTHER home you might consider. HomePath also has special incentive for buyers -- https://www.homepath.com/financing-special-offers.html
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Old 03-31-2017, 08:28 AM
 
Location: Phoenix AZ
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Quote:
Originally Posted by chet everett View Post
There are MANY very nice, ready to move in homes that are available through HomePath and the whole idea is that those that are in good shape are offered FIRST to folks that will live in them as opposed to investors or flippers. Of course you need to get inspection and determine if anything is "hidden" that might blow your budget but that is the same for HomePath as ANY OTHER home you might consider. HomePath also has special incentive for buyers -- https://www.homepath.com/financing-special-offers.html

I guess I disagree about homepath homes being "the same as any other home" because of the lack of disclosure & the repairs they frequently make without disclosing them. Hosing down a home with paint & putting in new carpet *seems* like a nice thing to do, but it can hide defects as well. A paint crew can knock off the termite tubes & paint over a water-damaged ceiling & your home inspector wouldn't know the home had those issues. New carpet over a slab full of cat-pee would mask things pretty effectively until the humidity comes up. A drain line with a "whoop-de-do" along it's length would kinda-sorta work well enough to "pass" the property report, but get nasty the first time you drained a bathtub. Further, disclosure in my state requires a seller to tell you "anything that might affect your decision to purchase" - that would include a psycho neighbor who starts & revs his Harley at 3:am every day or a yard that fills to a pond whenever it rains.

So, not to be a wet blanket, but be careful about properties that don't include a very long & detailed disclosure. You won't be able to duck that disclosure when *you* sell later.
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Old 03-31-2017, 08:40 AM
 
Location: Rochester, WA
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Any foreclosed or bank-owned property should be considered problematic for first-time or low-budget buyers. Because of the lack of disclosure, because if the lack of a 'friendly' transfer of the home, because the houses have usually sat vacant far too long, and houses out here deteriorate quickly if they are vacant.

Buy them only if you have a healthy knowledge of home construction or can hire it, and are prepared for the possibility of much being wrong.

I worry more about the nice looking ones than I do those that look like complete gut jobs... because the nice ones may tempt people who need a bargain, but who really don't have the budget to take on a lot of risk.

Last edited by Diana Holbrook; 03-31-2017 at 09:08 AM..
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Old 03-31-2017, 10:19 AM
 
28,384 posts, read 67,954,698 times
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Just to be perfectly clear -- when I said GET AN INSPECTION just like you would for any other house my intent was to emphasize that regardless of whether there are disclosures or not the value of the good inspection is KEY to making sure that what looks good is actually not going to require budget busting repairs.

I have been in situations like Diana Holbrook describes, with homes that look very tidy having a multitude of problems and I also understand what Zippyman is saying about "cover ups" hiding defects. It is NOT unique to HomePath properties NOR is there any evidence of HomePath being some plot to foist money pit on unsuspecting buyers. It is good program that can help buyers get into a nice home at a good price BUT the buyers absolutely need to go in with their eyes open. If they are capable of maintaining a home and handling any necessary fixes that are found during the inspection buyers can make an offer. If the inspection reports come back with items that are too costly for the buyer's budget they should move on...

Finally there is ZERO evidence that "long and detailed disclosures" truly help either buyers or sellers. They exist because lobbyists for the real estate trade want to protect agents from getting involved in lawsuits. Simple fact they are a way for agents to honestly say "I made no effort to conceal the condition of the property" which a long time ago was a real problem...
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Old 03-31-2017, 12:38 PM
 
Location: Greenville, SC
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Have sold a few that ony needed minor repairs/cosmetic stuff.
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Old 03-31-2017, 02:11 PM
 
Location: Rochester, WA
3,832 posts, read 2,056,232 times
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I agree that a friendly turnover and legal disclosure is not a panacea... Sellers may still hide issues even in friendly sales with a resident homeowner.

Issue with foreclosures is that if there is a question about the functionality or history of the home, the current owner can't answer it. They don't know.

And, often in foreclosures, the home was stripped of all appliances, water heater, and sometimes furnace... these items will have to be purchased for most kinds of financing to go through.

One of the biggies is that power and water are often turned off, and the home is often winterized. That means even the most basic functionality of the home is time consuming and costly to check. The buyer often has to pay to turn on power or water and sometimes is not allowed to.

The seller will often not agree to do usual seller functions like pumping and inspecting the septic. Buyer must pay for that also, if they need it checked.

I am currently working our way through a fannie mae purchase, with a client who is getting an FHA rehab loan. It's not impossible to make one of these homes work, but it's difficult and I don't recommend it for all buyers. It requires far more upfront cost and risk than a standard transaction.
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