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What's it Really Like to Buy A Foreclosure? A Realtor's Search for a New Home

By
Real Estate Agent with The Benya Group 618516

"The first rule of Fight Club - Don't talk about Fight Club"

I'm about to break all the rules about client confidentiality and fiduciary responsibility. Realtors aren't supposed to talk about contracts in detail, as it's a breach of trust with their clients. Well, it seems I just found a loophole! I'm in the process of buying a house myself. A foreclosure to be exact, and over the next few weeks I'm going to go into detail exactly how the negotiation, inspections, qualifying and closing actually workson my transaction. I've been quietly looking for months to try and find a home that fits my needs. My criteria has been this:

  • Purchase price of $250,000 or less
  • Detached Garage (I need a place to store antique muscle cars)
  • Fenced Yard (I've got 3 doggies, and I would rather they not run amok)
  • 3 bedrooms, 2 baths
  • 1 acre of land or more (Privacy is important to me!)
  • Located within 20 minutes of my office in Waldorf, MD
  • It's gotta be a great deal (Naturally!)

Sounds easy, right? Unfortunately, there isn't exactly a surplus of homes that meet all of my needs, so I've been searching for months. I've looked at rehab projects that fit the bill at $140,000 and move in ready homes that meet almost all of my needs at the top end of my price range. I've finally found a home that is close to everything I need, and here it is:

Looks nice, right? Well, I have to admit that it's in much better shape than most of the foreclosures that I run across. It's got fresh carpet. It has fresh paint, heck it even has that nice "new house smell" to it! It's on a acre of land, and it's got a nice big deck in the back.

However ~

  • It doesn't have a fenced in yard (add $3,000 for fencing)
  • It doesn't have a garage (I'll spend $20,000 adding that)
  • It's only 2 bedrooms (I don't have kids, so I can deal with that)
  • I need to replace all of the ceiling fans (6 fans, maybe $1,200 there?)
  • The back door frame is rotting ($800 to replace that)
  • It doesn't have enough space for my dining room furniture, so I will need to move a wall or two (another $2,000, but who's counting?
  • It also has a small kitchen with crappy appliances (I'll probably spend $3,000 on replacing those)

It's not quite the dream home, but it's certainly something I can work with. As an added bonus, this home qualifies for Rural Development financing, meaning I can put 0% down and get a fixed interest rate of 4.25%. I decided to immediately write a full price offer on the home. The listing price was $202,500, and when I called the listing agent, I found out there were already multiple offers. Since I really wanted to make sure I got the home (And I'm tired of looking at this point) I decided to offer $210,000 with the bank paying $4,200 in closing costs. As it turns out, I was willing to spend more than anyone else was on the property, and the bank accepted my offer. My next step was to tell my lender we had a property under contract and order a home inspection. I'll talk more about that later and keep this site updated to find out whether I end up making it to closing or not! So far, I will be spending $210,000 on the purchase of the house and the modifications I want to make it right for me will cost $27,000, so that brings me to a grand total of $237,000, which is under my desired cap of $250,000.

 

Comments (1)

Bridget "Mortgage Mama" McGee
SWBC Mortgage 410-960-2061 - Baltimore, MD
Maryland Mortgage Mama NMLS#196068

Wow, Talk about full disclosure!  This looks like it will fit the bill! It's good that you were open and had the vision to see the changes you could make for this house to become your home!  

USDA loans are a wonderful way to get a great house for no money down! 

All the best to you moving forward!!

Maryland Mortgage Mama

Sep 29, 2011 02:20 AM