Sometimes it seems that every non-short sale property that hits the market gets snatched up quick!
There are plenty of buyers, they just want deals! The bidding-up of values sometimes gets crazy.
I have a couple with a large family. They're looking to buy their first home. They can easily afford it as the payment is slightly higher than the current rent payment on their lease. They need down payment assistance and closing cost assistance. Doesn't make too strong of a looking buyer even though they will sail through underwriting. Very strong in all regards except the initial investment.
Regardless, a 6% concession is not as strong as a buyer with their own down payment. In all other regards, they are quite equal.
Since they're willing to do some work of their own on a home, they didn't search for the creme-puff, they looked for a home with some minor "problems". Preferably, broken window, peeling paint, broken stove, torn carpet in a room, damaged walls, empty pool, broken fan on A/C (they freeze up out here in AZ if you don't use them regularly.)
Then, we found it!!! Only a couple of major FHA blocking issues: The seller won't fill the pool, buyer must pay to do this for the inspection. Seller won't turn on electricity. Seller will make no repairs.
They did not care about whether or not they had to pay DPA or closing costs... They were smart enough to focus on the net. We worked all the numbers out and my clients' offer was accepted with no counter.
We picked it up LOW! It was priced low because it couldn't pass FHA inspection. Pool was drained and AC/Heater wouldn't kick on. Our target home!
As long as the home wouldn't pass inspection nobody could buy unless items were fixed. Fortunately, this bank specifically stated, "Seller will make no repairs! Buyers wishing to inspect must turn on utilities in their name!" Our perfect home!
For $790.00, Joe Caba of Mr. Kool AC/Heating and Pool came out, fixed the A/C, cleaned and set the pool, inspected the pool equipment and made everything work out.
My clients went after what nobody else thought was possible. They did know one thing was for certain:
Home ownership was always the end result they were focused on, in THEIR minds!
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REALTOR - Servicing Mesa, Tempe, Gilbert, Chandler, Ahwatukee, Scottsdale and other Phoenix metro cities. Mortgage planning experience and certification allows me to help with your lender.
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Supply / demand dictates price right? I always look for what no one else wants...
there are great buys in our market right now. some have been fixed, others not. the last two was one of each.
cheers
Aaron - It seems like I'm on your page with that one. We just have to find what others aren't going to be willing to deal with and buyers that see value in that.
Gary - Well, I hope that you got two sets of satisfied clients out of the whole thing!
Your clients, the buyers, actually made repairs on the property prior to closing? I think I may have lost something in the reading. Or did your buyers not need the home to qualify for FHA?
I appreciate your point about staying focused on the end result. That's important.
In some instances you can also use an FHA 203K loan. You buy the house as is, but determine what the costs of repairs are, appraise the value after the repairs, and finance based on the value after the repairs/improvements have been done. In so doing, you may not have to worry about repairs being done by banks or short sales before close of escrow.
Lynn - We had a contractor hired that was to be paid at close of escrow for the minor repairs needed. Since the repairs were completed, my buyers could order an FHA appraisal and pass inspection. They definitely worked themselves on this transaction.
Tom - A very good suggestion but most lenders out here are either reluctant, have no experience or won't do them at all. The ones that do take 30 to 45 days to close. That's too much of a wait when you are competing for low priced/large sqft. REO's. Still, FHA 203(k) is an EXCELLENT solution! Our buyers had to close before DPA ends.
Smart buyers see things that the others do not. Sounds like with help from you they got what they wanted. Nice job.
That is the way to focus on the end result and see no challenge as an obstacle to get there.
Please call me if you learn of anyone moving to "The OC"
Mark, this is a wave of the future I'm afraid. My brother works with this type of situation all of the time. Good for you. ;-)
Robert - It has been a treat working with this family. They are going to enjoy their home so much! And, they will have great family time together in their backyard pool!
Michael - They did keep their focus on making things happen. We've had some ups and downs along the way but all were overcome. Their faith in a positive outcome kept the flames fired.
Teri - It is! Fortunately, those agents that remain will be developing strong foundations of satisfied first time home buyers that will eventually be move-up clients.
I think you did a great service to your buyers helping them find such a home....I hear of so many agents that try to upsell their buyers into homes that they don't want, and totally ignore the homes that they DO want. Good job, and you've probably got some great long-term clients & referrals out of it. Congrats
-Peter H.
Peter - I do feel that helping a family find and secure a new home gives me a great feeling. It makes the whole job that much easier.
I wrote a contract on my listing yesterday afternoon because the lender on another house wouldn't turn on the required utilities for an FHA inspection.
Way to go outside the box. Special buyers need special realtors.
Mark, I have found this works with my Buyers that are not afraid of tackling minor repairs. Unfortunately, there are those without vision and sometimes you just can't make them see.
Hi Mark, Glad this is working out for your buyer. I think there will be many who can buy if they are willing to do the work. I know of many who did this in the late 80's early 90's.
The only problem I see arise in my area is with the water bill (thats assuming the copper is still intact). The lender will pay the water bill at closing, but not prior to closing. The city will not turn the water on until the bill is paid in full. The lender will not pay the bill in full until closing or reimburese the seller for the water bill. I've seen these bills in excess of 3,000 dollars. Crazy!
Glad it all worked out.
Mark - Sounds like the smartest thing that these buyers did was get you for their agent. You have what it takes to make it work. Happy Clients - Great feeling, isn't it?