Posted by TRandle on June 30, 2000 at 12:05:11:
GN,
Thanks for the update - sounds like big dollars there. Congrats…
VA Short Sale Update (for TRandle) - Posted by GregNorman
Posted by GregNorman on June 29, 2000 at 16:20:59:
After months of ‘hanging around’, we finally closed on it:
Owner rented property where tenants moved out and left water pressurized, but had no heat. Cold snap hit and burst a pipe upstairs in this 2 lvl colonial (no basement, only crawlspace). Neighbors saw the place WEEKS later as there was a frozen waterfall on the back deck. They thought it was so cool they took pictures!
Insurance didn’t cover the damage and owners called me. They were 2 months behind and they owe about $130k on a VA loan. Homes in the area go for $150k-$160k (exact same model being FSBO’d up the street for $167k). We originally offered $102k. Owner brought in an agent to work the short sale thing with VA and Countrywide (he’s done them before). They were dragging their feet and it took a couple of months before they say VA/Countrywide will do it. So I call my lender and go over there with my contractor to do a final look. Contractor finds the water is causing mold (weather is changing) and much more work is needed (including a chimney that appears to be pulling away from the house a couple of inches). Note: I do not like to ‘change my tune’ after setting a price, but 1. things really did get worse and 2. I really didn’t see that chimney pulling away.
I call and tell the owner ‘no way’, my lender won’t go for it. I say I can’t do it b/c of the POSSIBLE structural problems (there are too many other deals out there to risk this). Owner pleads for me to make some kind of offer so I call up contractor and ask for worse case scenario. He says $20k more… TOPS.
I call back owner and tell them $82k. They call VA/Countrywide, via broker, who says ‘No’. I ask if they’ve seen the place. They said they sent an appraiser over earlier in the process. I asked if the appraiser had seen the inside. They weren’t sure. I told them to check. No they hadn’t, so back out they went for another try (included w/ pictures and details of the problems). I also told them no lender would ever allow for a loan on that home (water pipe still busted, possible foundation issue). They come back another month later and say they’ll do it if I close in about 2 weeks. I call up lender and get it done.
Good news is that during this whole thing I get 2 pieces of good news: 1. Neighbor was hoping to get the lot after they condemn it (it ain’t THAT bad). He said they wouldn’t b/c foundation was so solid. (I’m not sure he wasn’t making that whole thing up. I hadn’t even told him my story yet.) He also shared life story of home, too. 2. My contractor gets masonry buddy to check chimney and foundation. He’s said foundation is in good shape. Chimney will either need to be a. pulled back w/ braces, b. jacked up with cement underneath, or c. taken down and put back up. Expensive, but not close to $20k. I can’t see spending more than $30k on the rehab (total) and that includes misc/x-factor stuff. Hech, it’s so hard to catch, I may just try to resell it without fixing the chimney.
Bottom line is I don’t think this thing would have come together without asking for the second (more thorough) appraisal and without the home appearing to be in terrible condition.
I’m not sure if this is what you were looking for as an update, feel free to ask me any other questions (I’m sure I left something out!). Hope this helps for future situations.
GregNorman