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Ok, I'm looking for advise on how to deal with banks who keep denying a loan I need because the bank says its a rehab property.
We had an appraisal completed, and the appraiser came back listing problems with the property, and an estimate $50,000 in repairs.
Repairs needed
New carpeting
New kitchen floor
A tub surround
A bathroom cabinet and sink
A bathroom floor
A toilet installed
Total estimated expense around $5,000 maximum, of which I have $9,000 credit from the sellers to cover all repairs.
I drove to the property the other day and took photos for the bankers, hoping they would look. The new photos are at 5155 West Boulevard . I even doubled my down payment, to 20% down, (I could afford to go 40% down, but dont wish to).
Other then getting a new appraisal, not wanting to delay things further, (we're now passed the closing date deadline), any other suggestions on how to convince the bank that the property needs cosmetics for the most part? I keep getting rejects with the reason they are not wanting to secure a rehab project.
This is one of those loans that needed closed yesterday because its about 40% off of the true market value, and an exact match for my needs.
Location: central, between Pepe's Tacos and Roberto's
2,086 posts, read 6,751,464 times
Reputation: 958
If the bank and the appraiser are on the same page with this, I would say that you very likely have no recourse. I honestly can't see why they wouldn't lend on it. There are a few programs that even lend the money needed to rehab the property.
If the bank and the appraiser are on the same page with this, I would say that you very likely have no recourse. I honestly can't see why they wouldn't lend on it. There are a few programs that even lend the money needed to rehab the property.
From what the banks are saying, they arent even looking at the photos I'm providing. Its far from a rehab project. While its been vacant for awhile, it was because of legal issues with the previous owner. (bank repo).
While one bathroom needs work, the property has 5 of them.. and I dont need 5 bathrooms to move in.
The photos (to me) clearly show that some of the rooms need carpeting, but thats not major in my mind.
I dont want to lose this property because one bathroom needs a tub surround, and carpeting installed, especially since I have the funds to do these repairs.
Location: central, between Pepe's Tacos and Roberto's
2,086 posts, read 6,751,464 times
Reputation: 958
Quote:
Originally Posted by pghquest
From what the banks are saying, they arent even looking at the photos I'm providing. Its far from a rehab project. While its been vacant for awhile, it was because of legal issues with the previous owner. (bank repo).
While one bathroom needs work, the property has 5 of them.. and I dont need 5 bathrooms to move in.
The photos (to me) clearly show that some of the rooms need carpeting, but thats not major in my mind.
I dont want to lose this property because one bathroom needs a tub surround, and carpeting installed, especially since I have the funds to do these repairs.
I understand. The issue is with the appraisal and the (frankly unecessary and it sounds like inaccurate) comments the appraiser made. Unfortunately the appraiser holds more clout with the bank than you. Possibility of an appraisal review? The bank won't consider the fact that you do have the funds for the necessary repairs?
I understand. The issue is with the appraisal and the (frankly unecessary and it sounds like inaccurate) comments the appraiser made. Unfortunately the appraiser holds more clout with the bank than you. Possibility of an appraisal review? The bank won't consider the fact that you do have the funds for the necessary repairs?
I've even offered to put the funds into escrow, but their response was that $9,000 (credit from the seller) isnt enough to do the $50,000 in repairs the appraiser stated is needed. I'm discussing ordering a new appraisal now, but looking for other ways because I dont have 2 more weeks to wait for an appraisal. Its a 6,000 sf home and comps are very tough in the area.
Would the bank consider having a contractor provide estimates for the required repairs? There's a huge difference between $50k and $5k, maybe a professional could shed light on the situation.
Trying to convince the bank that the property isn't a "complete rehab" isn't easy. They have their own criteria and they do things different.
My advice:
1. Put down 40% (even tho I know you don't want to)
2. Get an equitiy line of credit (if you can) for the rest
3. Send the bank a list of estimates to bring the property to current value
4. Speak with a local attorney
Trying to convince the bank that the property isn't a "complete rehab" isn't easy. They have their own criteria and they do things different.
My advice:
1. Put down 40% (even tho I know you don't want to)
2. Get an equitiy line of credit (if you can) for the rest
3. Send the bank a list of estimates to bring the property to current value
4. Speak with a local attorney
G/L and let us know.
Loan is back in underwriting, since we increased our deposit from 10% to 20%.. Your on the same thought process that I was thinking if they turn this down.
One of the comps on the appraisal shows a recent sale of $179K (bank repo).. its currently on the market for $349K... The new sales price is not reflected on the appraisal. Loan amount being sought for my home, $110K...
The new "list price" for the comparable shouldn't matter to the appraiser, because his/her value is based upon actual sale prices. However, it should be noted that the prior sales was non-arm's length (if that was the case). Also, if no material changes had been made since that time and it's current listing is still comparable to the subject, than it should have been listed as a competitive listing. Even if the appraiser doesn't grid out the listing, it's information should be included on the top of the 1004 form.
At the top of the second page of the 1004 form it should read....
The appraiser found ____ number of competive listings in the subject neighborhood ranging from $____ to $_____
The appraiser found ____ number of comparable sales in the subject neighborhood ranging form $____ to $____
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