Author Topic: Please Help - Home Purchase Legal Questions?  (Read 1582 times)

JAYSLOL

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Please Help - Home Purchase Legal Questions?
« on: February 28, 2016, 10:27:06 AM »
If this needs to go into the Homeownership/Landlording section let me know.

My parents are renting, but retiring very soon and are looking for a house or townhouse to purchase.  Due to the current housing market where we are, it has been challenging finding a place for them.  They made an offer, which was accepted on a townhouse that needs some updating, but they still need a small mortgage to cover the full cost and fund the work needed to make the place livable.  The problem they have is the place has an old water heater and very old gas furnace, the previous owner has already moved out and is likely very old because they live in a care facility now.  The owner is not likely to have the funds to fix these issues until the house sells, which is obviously too late.  My parents can't get insurance on the place until the hot water tank and furnace are replace, meaning they also can't get financing if it's not insured.  They don't own it yet, so they don't want to pay for the work, but they can't buy it without the insurance.  Is there a way around this? 

The other thing that occurred to me is that the realtor said the place had an accepted offer before my parents made an offer, which "fell through due to financing" according to the realtor.  Could this mean the realtor KNEW that the place couldn't be insured (the real reason the previous offer couldn't get financing) the way it was and let my parents pay for a home inspection and go though all the hoops of making an offer without telling them they wouldn't be able to get a mortgage?  Is there any way to prove that he knew or get in touch with the other party that made the previous offer to find out what happened? 

We are all feeling very stuck and any advice would be very helpful, thanks

Cassie

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Re: Please Help - Home Purchase Legal Questions?
« Reply #1 on: February 28, 2016, 11:29:38 AM »
Instead of assuming the owner can't afford to replace those things I think the realtor needs to talk to the owner about this. Otherwise it won't sell to anyone unless they have all cash.  Is it possible that your parents could pay all cash if the home price was reduced?  WE bought a foreclosure for all cash and the bank had to reduce it for way under market price because no one could get a loan on it due to the condition.  4 years later after we fixed it -it is worth double what we paid and paid for fixing it up.

JAYSLOL

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Re: Please Help - Home Purchase Legal Questions?
« Reply #2 on: February 28, 2016, 11:47:34 AM »
Instead of assuming the owner can't afford to replace those things I think the realtor needs to talk to the owner about this. Otherwise it won't sell to anyone unless they have all cash.  Is it possible that your parents could pay all cash if the home price was reduced?  WE bought a foreclosure for all cash and the bank had to reduce it for way under market price because no one could get a loan on it due to the condition.  4 years later after we fixed it -it is worth double what we paid and paid for fixing it up.

They may have the funds, although the other concern is that if they have money to put in, they may also want to up the price by more than the cost of the repairs.  It's that kind of market here where everyone assumes if you put 10k into your house it automatically worth 25k more, you know, because of those property shows.  :)

They may be able to afford the place in cash if it goes down in price, but I don't think they are comfortable having no insurance on a place they need to retire in, even if it's temporary.  I'll check, but insurance may be required by the HOA as it's connected to the other units.

Axecleaver

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Re: Please Help - Home Purchase Legal Questions?
« Reply #3 on: February 28, 2016, 04:19:43 PM »
Are you sure it's insurance holding you up and not mortgage underwriting? Homeowners insurance doesn't typically ask about furnace age, which makes me think this is more likely an underwriting requirement of the bank.

You may be able to work around it by getting financing through a local bank that doesn't use the Fannie Mae checklist, or by finding an insurer who will insure you. Try calling an independent insurance broker in your town who you can meet with in person. They may know a way through this using more exotic insurance products.

Cassie

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Re: Please Help - Home Purchase Legal Questions?
« Reply #4 on: February 28, 2016, 04:38:17 PM »
We were able to insure our home right away even though it was in bad shape.