Profile picture for pgarnevich

I was going to purchase a Bank owned home

The listing price was $86,000. My Real Estate agent brought me to the bank that owned the home where I was informed that the cash price was $86,000 BUT if they were to give me a mortgage it would have to be for $120,000 to cover needed repairs. Should my agent have brought me to the Bank?
  • November 03 2013 - Putnam
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Answers (9)

That's a new one. Obviously the bank knows there are major issues that will prevent a lender from loaning money on the house without certain things working, like HVAC or good windows or something. Bank owned homes are often in poor repair since the previous owner gave up and knew they would lose the house and let stuff go. How badly do you want it and is it worth the $120k? You can always counter the $120k price and see if they come down.

Should your agent have taken you to the bank - No. Sounds like they wanted the bank to do the work of telling you. Maybe there is more reason that we are not being told.

tim
  • November 03 2013
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When a property is used as collateral for a mortgage loan there must be no health or safety issues. Excuse the general terms but this could mean a working heating system, no broken windows or no missing hand rails. There r loans to help with this process FHA 203 K or Fannie Mae Home Style. Enough said. If u are interested in making an offer contact the loan officer u r working with and talk with them about rehab loans Best of luck to you
  • November 03 2013
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Be wary of answers from agents who are out of state.  They often give misinformation for our area.

If a home is in poor condition, then banks will not loan money on them.  As the lender below noted, there is the FHA 203k loan, where you will borrow a higher amount, but then the repairs will be made and paid out of the mortgage amount.

There is not enough information to be sure that is what happened in your situation, but it sure sounds like it.

Yes, your agent should have directed you to a mortgage company. Whether you go to the company that also owns the property is up to you.  However, often times the selling bank will make your applying thought them mandatory for them to consider your offer.  You may not need to ultimately choose to work with them, but you may have to apply through them.
  • November 03 2013
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Profile picture for CallTheSisters
@Don Fabrizio-Garcia

Customarily we do not knock other agents who are trying to give rational answers to general questions.  Nothing in the question or answer was state specific.

However from the only review you have I see:
"Don helped us sell our house in California"  You are currently licensed in CT but obviously had no problem crossing state lines with your advice.
  • November 04 2013
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Profile picture for RealEstateCrew
Sounds like your agent is trying to find the product that was requested.  If you have another bank in mind, go over what you need with that bank.  
  • November 04 2013
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Absolutely, why not?  In some situations, the bank is eager to find someone to take inventory off of their balance sheet.  It is very expensive to carry a property that continues to deteriorate.  It is not unheard of for a bank to make almost every accommodation for a qualified buyer.  

Amy Beth Stern
  • November 04 2013
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Actually, "Sisters," I have been licensed and sold real estate in both Connecticut and California.

The question is specific to a property in Putnam, Connecticut.

There absolutely was some potential misinformation given in their answer - sometimes, here in Connecticut, it is a requirement of the seller of an REO property that any buyer who needs financing be approved through the seller.
They clearly bashed the agent for doing something that is sometimes required in our area.

We are licensed in specific states.  Advice should probably not be given outside your state of licensing.
  • November 04 2013
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Profile picture for CallTheSisters
@Don
that any buyer who needs financing be approved through the seller.


Being approved is one thing.  Wells Fargo and BofA tried that here and have since given it up.  You can't make the buyer get financing from a particular institution as a condition of sale.

Offering the home for sale at $86,000 and not specifying it was cash only - then claiming to finance the amount would have to be $120,000 sounds like bait and switch.  The bank is not an authority on repairs and should not be determining how much it costs.

They clearly bashed the agent for doing something that is sometimes required in our area.  It is also required that as agents we disclose.  Obviously the consumer did not understand why they were being led to a particular bank. If it was your customer or client would they have walked away feeling misguided, or would you have taken the time to be sure they understood the process?

  • November 04 2013
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Sisters - I give up.
You have an axe to grind, so have at it.
Real estate is local.  Offering advice outside of your licensed state - heck, even your local area - can be dangerous and wrong information can be provided to the consumer.
We clearly do not have enough information here to determine whether or not the buyer's agent properly disclosed.  I have no idea how your responses help the consumer.
  • November 04 2013
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