JUST SOLD! Brick Mid-Century Rambler

I just concluded this transaction for my buyers. 

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Our story begins in November of 2013, when the home was purchased by a real estate investor after the home had foreclosed.  The property was pretty dingy and needed some TLC.  The investor paid $70,000 cash and began work on the repairs.

In February, the property was listed for $123,000.  At that time, my clients and I had been shopping in the area for an affordable home.  Unfortunately, all we could find were overpriced scratch-and-dent properties.  My clients needed either something that was ready to be lived in, or priced to accommodate any work they would have to put into it.  So, when this property came along.  We immediately recognized its potential.  

Our initial offer was $107,000 and asking for $3,500 in closing costs. Due to the winter season and the fact that the home was vacant, we decided to press our luck on what the seller would tolerate as an offer.  We expected a counteroffer and we quickly found out.  The seller countered at $119,900 while paying $3,500 in closing costs.  We countered again at $116,000 including our initial closing costs allowance.  Finally, the seller bottomed out at $119,000 with the closing cost allowance included.  

Once we finalized the agreement, we began our due diligence.  The plumbing was an obvious issue.  Low pressure and malfunctioning valves needed to be addressed. Since my clients were using an FHA loan, we wanted to avoid clouding the loan process up with a repair addendum.  Instead, we chose to verbally ask the seller to make specific repairs and extended our due diligence deadline in an addendum while we waited in good faith for the repairs to be made.  The requested repairs were made and we moved forward with the appraisal.  

That is when Pandora's Box was opened on us.  It turns out that FHA had recent rule changes that prevent a home that is being flipped, like the one my were purchasing, from being placed under contract within 90 days of the purchase date.  The home was bought by the seller on November 19, and we placed it under contract on February 12.  We were short just 7 days.  Unfortunately, this placed a red flag in FHA's case file on the home.  Per FHA guidelines, the underwriter requested a copy of the home inspection (with all its boogers) and a second appraisal was ordered.  

Due to a disgruntled neighbor who was compelled to remove all of his cars and junk from the driveway when the seller acquired the home, the second appraiser cited that the foundation needed a structural engineer's inspection based on the angry neighbor's embellished testimony of how bad the foundation had settled.  The underwriter then sent us a note indicating that a list of 20 items needed to be addressed and repaired including electrical, more plumbing, HVAC, and others.  Each required a licensed contractor specialized in their field to make the inspections.  In all, we had five specialists descend on the home.

The listing agent was perplexed as was I.  Nevertheless, we pressed forward and completed our tedious checklists. The foundation was found to be sound and all the repair items were addressed. Finally, we closed the transaction.

Congratulations to my buyers on their purchase!  

If you are in the market for a home, and need a hard working agent who will get the transaction done, CONTACT ME, and you won't be disappointed.