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I am a new poster on this site but have been a reader for quite sometime so any advice from all others out there would be greatly appreciated. I will be giving all the facts behind this situation so please bear with me if this ends up a novel in length.
Anyways, my wife and I moving to an area that is closer to family. We had a house where we previously lived but have it up for rent (unfortunately, it has not been rented yet so knock on wood there). We also had our first baby on the way so a lot is going on over the next five or so months.
We have been browsing the houses in our area and price range for a few weeks now and have found some decent houses. Most don't work but with the 20 that we have seen, we have gotten a taste of what is offered. The other night, we had a chance to finally see a house and it blew us away.
Basically this house was our dream home. It had the space, the location, the yard, the basement, and everything else we wanted in a house. Simply put, we are not likely to find another house our range with so much. Because with an amazing house like this, things are not that simple. Here are a few things we are wary of:
1.) Structural issues: The house is around ten years old and has had some structural issues somewhere around 4-5 years. Is it true that is usually when the problems occur? From what I saw, it didn't appear to have another other structural issues but you never know. This area and the State is one that has problems with structural issues. It does have a lifetime warranty from a foundation company. Not sure if that matters or not but it is something we are definitely wary about.
2.) There are renters in there and have been there for years: The house has been rented for about 4-5 years and they are hoarders. Holy crap! I can't explain how much stuff they have but there is no doubt in my mind that has scared people away. They actually have two animals and surprisingly, there were no smells that we were aware of from entering in the house (a good thing). But with all the stuff they have, it would be very, very, very easy to hide cracks or other structural issues. Clutter is king in this house but I am a little worried about what their junk is hiding. Why exactly would the renters clean up because I certainly wouldn't want my house taken from me and bought?
3.) It seems like too good of a deal to be true: This price is at least $100,000 less than it should be. Honestly, the house is amazing and something my wife and I could live in for years. While there is clutter everywhere and questions about structural, it almost seems to good to be true.
4.) It is a short sale: It has been on the market since June and likely has not gotten much interest. For those experts out there, how flexible are they on there price? It also says that it will take 60-90 to get a response for an offer. Are they serious? Really 3 months?
5.) Will structural hurt resale? My wife and I could stay in there forever but IF something happens and we need to move, how much will that play a factor in it? There have also been a lot of people in and out of the house so I am a bit worried when checking out the public records. That type of thing makes me wonder why exactly it has been bought and sold so often?
Anyways, that is the situation. Any feedback on any of these issues would be great. Honestly, the house scares me but at the same time the house is it. It was simply amazing for our price range. The area, the size, the yard, the views, and everything else will destroy anything we see in the range from here on out.
I'll just take a shot at #5. Speaking from personal experience, there are very legitimate reasons that a particular house can be bought and sold numerous times. Particularly homes which may be appropriate for couples with very young children - they can be quickly outgrown. Starter homes in areas where a lot of "upwardly mobile" people like to live can often be springboards to the next house. Don't know if these particular circumstances are on point, but they are just examples.
But generally speaking, IMO, it is a good sign that the house has been bought and sold so often because that means that a lot of buyers have checked out the house and have been satisfied with its condition.
3-Whatever the bank will take...
4-It could take 60-90 to close but shouldn't take that long to get a response. If it does, the list agent doesn't know how to do a short sale. I spoke with one today that has a short sale listed and is clueless. It pretty much means it's going to be a foreclosure.
If the price is 100,000 less than market, then that should help if there are problems that need repair. When the renters go, then is the time to really see what is there. However, they are not going to go until and unless you buy it.
I would say if it's a house you want, go for it.
the structural problems can't be that bad and there is a garentee on the foundation. The 3 months work to get a response will give you time to rent/ sell your other house.
go for it. At least you know it's been bought and sold easily. if it doesn't work, sell it. it sounds like the equity will not be a problem for you if you stay for a while.
Do you have an agent? One that is familiar with buying a short sale? Brandon is right, a lot of these listing agents don't have a clue. I had a buyer make an offer on the house and the listing agent sat on it for a week, we had given them three days. Finally, I looked up the current owner, a financial institute, and called them. Things moved very quickly after that.
As far as structural issues are concerned, I'm not sure there's any rule of thumb as to when they will occur other than during "acts of God". You will need a good home inspector. One who isn’t afraid to move stuff or ask the renters to move it. Again, your agent should know one. I would also recommend a home warranty.
And congratulations on finding a “dream” home and not just something that will do. I have noticed that since things have gone on the internet and people get a chance to research, they tend to have a better chance of finding their dreams.
You need to completely understand what the "guarantee on the foundation" includes and excludes. There are many variations on foundation guarantees and many of them don't lower your risk very much. For example, some guarantees state that the company will come back in at no charge and redo the work they did before. However, it excludes any damage that has been done to the house and if additional work is required over and above what they did before, they will charge for it.
Houses with current or past structural problems can be sold. However, your buyer pool is much smaller as many people will take advantage of the many houses on the market with no structural problems.
GnosticCyn,
Yes, I do have an agent and assume he has experience with short sales (I am not 100% sure). It seems like the listing agent doesn't care about this house and that is what may actually make it hard. Getting a showing was very, very difficult to begin with. It just seems they don't want to sell, and if I was the renter, I don't blame them. I am worried what will come up once their crap is cleaned up though.
We will definitely be getting a good inspector and probably paying extra for someone who is a structural engineer. We would rather pay a few hundred more for an expensive house (at least in our eyes). Thank you for the nice note about finding our dream home. We obviously hope that we might be able to get it and that structural issues don't turn it into a nightmare.
gbone,
Do you know how we find out more information about that? It is definitely something I am interested in finding more about.
Also, is it usually within the first five years that structural issues occur (I read it and just wanted to see if we had an expert out there)?
Thanks again for all the help and advice! This is a great site!
gbone,
Do you know how we find out more information about that? It is definitely something I am interested in finding more about
If you can, get a copy of the guarantee from the owner of the house that had the work done. If not, find out which company did the work and go to them to find out what the guarantee is and get it in writing. Also make sure that the guarantee passes to the next owner. Good luck!
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