How To Buy A House That Needs Minor Repairs…

Problem: You are in the process of buying a house that needs minor repairs – but the seller refuses to do them – what do you do?

You would be amazed how many people (including realtors) that don’t know this is a way to solve this common problem when you buy a house.

This situation happens a lot, especially on bank owned homes.

The simple answer is to use an escrow hold back. …an escrow hold back is a small amount of money that is held out of the seller’s proceeds from the sale to make the repairs. Of course you and the seller would have to agree on this.

You have to write the escrow hold back right into the contract – under special provisions. To avoid having to rewrite this clause – be specific. Your realtor will need to write – “An escrow hold back in the amount of $______ will be used for (specific) repairs.”

One key with the escrow hold back is the repairs need to be minor – and they can’t take that long to finish. …an average amount of an escrow hold back is $1,500 to $5,000.

Knowing how to solve minor repair problems on an offer – can sometimes make the difference between getting a great deal on a house, or not buying it at all.

If this situation comes up with your deal – just give me a call – I can help you out.

That’s it for today!

Have a good day today! …and thanks for reading.

Brett

Get Pre Approved For A Loan Here.

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Cozumel Pic, And Mortgage Tidbit...

If you have never been to Cozumel, I would highly recommend it. I spent the weekend in Cozumel with my fiance. Here's a pic...

Mortgage Tip:
If you need financing to purchase a home in the country I would use either USDA, FHA, or VA.
The reason I didn’t mention conventional is that a conventional loan generally will have more restrictions on the comparable sales used in the appraisal.
Specifically conventional loans have a conservative limit on how far they will allow the comparable sales used in the appraisal to be away from the subject property.
For this reason you often run into a Catch-22 using conventional loans in a rural environment.
…Yes you can use a conventional loan, but the comps are too far away from the subject property so you can’t use a conventional loan, etc…
Generally speaking FHA, USDA, and VA will accept comparable sales that are “common for the area”. …So, in other words if the comparable sales are all 5 miles away and that’s what is common for the area – then generally they will accept this.
If you are unsure what type of financing is best to use for your next purchase – shoot me an email or give me a call and tell me about your situation.
That’s it for today!
Have a good day today! …and thanks for reading.
Brett
Get Pre Approved For A Loan Here.
My Previous Blog Posts

Know This Before You Try To Buy A House…

One of the most important things you will have to do when you apply for a loan is to show that you have the money for the down payment.

This is called sourcing in the mortgage industry.

For instance, the down payment on an FHA loan is 3.5%. If the seller is paying your closing costs – you will still have to pay your 3.5% down payment.

You can have this money in your checking account or savings account now. You can borrow it from your retirement account. …You can even get the down payment as a gift.

…but, it’s crucial that we are able to show where it’s coming from.

I can tell you that cash is a problem when it comes to sourcing your down payment. You will need to put it in the bank and leave it for 60 days before we can use it.

If you aren’t sure where your down payment is coming from – find out now. …before you apply for a loan.

That’s it for today!

Have a good day today! …and thanks for reading.

Brett

Get Pre Approved For A Loan Here.

My Previous Blog Posts

Changes To Dodd-Frank Right Around The Corner?…

I hope you had a good weekend!

There could be some changes for the mortgage industry coming from Washington DC soon.

The House is expected to vote on the Financial Choice Act this next week.

The Financial Choice Act, sponsored by FSC Chairman Jeb Hensarling (R-TX) would repeal or modify many of the changes made by the Dodd-Frank Wall Street Reform and Consumer Protection Act, including broad changes in financial regulations, revising the structure of the Consumer Financial Protection Bureau, and limiting much of its authority.

It also includes provisions that will affect the home mortgage industry.

I’m watching this bill with great interest, and will keep you informed of it’s progress.

That’s it for today!

Have a good day today! …and thanks for reading.

Brett

Get Pre Approved For A Loan Here.

My Previous Blog Posts