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first time home buyer: damage to a home lower home value?

we are renting now from the home owner and want to buy the home, she doesn't want the house and is letting it go to foreclosure.
Before she moved out there was damage done to the home by her animals: dry wall and trim ripped out from dogs, the garage doors are destroyed from the horses kicking it that were turned out on the property and stucco missing in spots from the horses kicking the house.
How can I buy the home before I lose it completely?
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February 17 - New Kingman-Butler
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Answers (9)

Dear User!!

Pretty much every one has given you great advice. One thing that I noticed that is missing is the type of loan you will need. Being the home has damamge most banks will not finance the home with out repairs done first. BUT being you will be a primary buyer (living in the home) you can go FHA. As long as the repairs are more then $5000.00 your can get waht is known as an FHA 203K rehabilitation Loan. This will include extra money in your loan for the repairs and could include any upgrades needed. Now you do have to buy the home at an appriased value with the damages and then you can repair it to future value that an appraiser can figure out with repairs and upgrades. If you have an Annie-Mac lender in your area contact them and find out how to go about this. But remember you do still need to make a deal with the bank to buy the home and a good Realtor with experiance in these situations would be a good start.

I hope this helps

Mike

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February 17
This is a tough situation you're in, 954685.

If the house has significant damage, you will probably not be able to buy it "as-is," because a lender is going to require that the property meets certain standards before approving a loan.

I suggest asking the owner for a reduction in the rent so that you can save up enough to find a new place to live after foreclosure.

All the best,
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February 17
Dear Lord, I'm going to make this as short and sweet as i can to try to avoid hurt feelings.

#1 Short sale might be the best avenue if you were not a current tenant sharing the same address, you have a connection to the owner and the property and for this reason a short sale is probably not going to happen for you because most policy's forbid it and documents required for a short sale will make this known.

#2 a disclosed dual agent has an equal fiduciary responsibility to both buyer and seller (In the case with a bank owned or any other seller with listing agent, many would say its advantageous for you to deal directly with the list agent for MANY reasons that I wont elaborate on publicly).

#3 Your best hope is to contact the first mortgage holder directly, let them know your interest in purchasing the property. If the owner is willing to do a dead in lieu of foreclosure and the bank is local it will better your odds. If its a nationwide bank its like talking to brick wall because they have practices in place and its a file sitting thousands of others on someones desk... the good news is you have tenancy and with that you can be heard pretty loud if you so choose to be (i wont elaborate publicly on ways to be heard), but suffice to say banks dont want to deal with vacating a house & tenants in place.      
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February 17
In my opinion, you should suggests to the owner that they might want to do a short sale instead of allowing it to go to foreclosure (assuming they qualify-sometimes a short sale is not in their best interest).  Find a Buyer's agent to represent you that is highly experienced in doing short sales.  Have them ask the questions of the landlord They may be able to help you walk through the process.  Hopefully the seller has or will get their own Seller's agent, but if not you don't want to share agents.  The seller needs an agent from a different company or a real estate lawyer to represent them.

Your agent should be able to help explain your rights.  If not, get a real estate lawyer to help you decide your best course of action. Some banks that foreclose will give the tenant the first right opportunity to buy the house.

Keep in mind that you have a rental contract and it obligates you to make rent payments to the owner in spite of this problem.  Once the house is foreclosed, you owe the rent to the new owner.
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February 17
One other point on this, since you're renting the home, if you have a valid lease which has not yet met the end of its term, the bank will have to honor that lease in most situations.  If the lease has expired and converted to a month-to-month lease or you're out of your lease completely, you have less protection. 
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February 17
Glen is right it would be in the sellers best interest to sell it to you thru the short sale process. You need to know the value of the home in the open market as that will dictate the amount of mortgage you are going to need. 

If as Glen states you have been Approved for a loan subject to identifying a home, a purchase and sales agreement and satisfactory appraisal you will be ready if you get the opportunity to move forward.

Lastly if it does go the foreclosure route, you can bid at the auction.  This is your best way other than dealing with the current owner to assure your ability to buy the home.

 One good thing is you wont have to worry about evicting the occupant.

Good luck.
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February 17
I would agree with Glenn and add only one thing.  If it goes to foreclosure, you will not want the real estate agent who represents the bank to be your agent. Find your own, even if it is someone in the same office.   In any "dual agency",  the agent's primary responsibility is to the owner, rather than the buyer.  This is especially true where the bank is the owner, because more than likely the agent has represented the bank many times in the past and will again if they continue to represent the bank well.  Therefore they are more likely to protect the bank's interests instead of yours, where your future contribution to their livelihood is far less sure.

Good luck to you! 
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February 17
If the owner is not willing to cooperate with you initially, and let it go to foreclosure, I'm assuming the owner is 'upside down' on their loan, meaning it the sale would be a short sale.  Many sellers of short sales are very emotionally, as well as financially, distressed and are not willing to deal with selling their home.  My advice to you is the following:

1.  Talk to your owner/landlord to determine why they don't want to sell the home to you.  Perhaps there's a solution to that reason that you can both agree to.  It is generally much better to sell the home as a short sale than to let it go in foreclosure.  Try to find out how much the owner currently owes on the home.

2.  Find a local real estate agent or two who can give you an idea of the home's realistic current value in its current condition.  If the value of the home is greater than the amount owed on the home, then it would definitely be in the owner's best financial interest to sell it to you.  If the value of the home is less than the current loans, then the seller would have to do a short sale, but at least you'll know this.  Also get the real estate agents to help you explain to the owner why it's likely in their best interest to sell the home vs letting it go in foreclosure.

3.  If you have not already done so, find a local loan officer to help you make sure you're qualified to get a loan to buy the house.  Then you (or your real estate agent) can approach the owner and show what the house is worth, what you're willing to offer and that you're qualified to buy it. 

4.  If all else fails and the owner lets the home go through the foreclosure process, all hope is not lost for you.  What would then happen is the home would become owned by a bank.  That bank will hire a real estate agent to find out if the home is vacant or occupied.  When they find you there, talk openly with that agent about your desire to buy the home.  That agent can then advise you on how that particular bank would handle the situation, but some banks might be willing to let you stay in the home and sell it to you.  I will let you know though, that most banks will want you to move out so they can sell the home on the open market. 

Good luck!
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February 17
The current owner would have to be willing to sell you the home.  You and the current owner would have to sign a purchase contract that allows you to buy the home.  Feel free to contact me and as much as possible to help you.
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February 17
 
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first time home buyer: damage to a home lower home value?
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