In the "Good 'ol Days of Real Estate" it was said the business was all about "Location, Location, Location!" Today in the year 2012, as we recover from the Great Recession we know a more correct and contemporary rendering of that phrase is "Location, Condition and Price" will determine a proper Value for any particular person or purpose.
With Much of the For Sale inventory, being Short Sale Homes or, Bank Owned Homes we find with varying levels of problems in the "Condition" department. Common items requiring correction seen are: Carpets that are shot; Exterior-Siding decay; Roof is worn out with bad gutters; Kitchen is very dated, appliances are old and counter-tops are worn out. All items are easy enough to correct but, the seller of a short sale has no funds to take on the item(s).
How do these deficiencies affect the home's value? -- Answer: Big Time! For example: a home that needs a roof repair for $10,000 may see the price drop $15,000 to $20,000. Why? Most conventional home loans will require such an item to be repaired prior to closing, and tends to cause many buyers move on to another property to purchase.
When you undertake a home repair, it is important to use the Right Tool. Likewise, when purchasing a Fixer Home, it is important to use the Right Loan. For over 20 years there has been a U.S. Government sponsored home loan program called the FHA 203k Loan that can help with the purchase of these homes that are in need of repair. This is an excellent program and timely for today's conditions but, not very well known. In a nutshell, with a 203k loan you can both Purchase the home (owner occupied buyer); and borrow the funds to make renovations and repairs -- All In One Loan!
Recently both John and Kathryn took the opportunity take certification training in the FHA 203k rehab home loan offered by ReBuildUSA. With support from the home improvement company Lowes, ReBuildUSA put together a Real Estate Broker Program, and a Home Lender program, to better help us in the industry have a deeper understanding of the wide range of options the 203k loan provides, and truly amazing benefits offered to today's home-buyer and our community. From the brief video below you will learn as we did, that the FHA 203k Renovation loan is so much more than the simple explanation we've provided above.
For another voice on this, here's a recent television interview:
Not long ago, one of our home buyers purchased a Short Sale home with the 203k loan. For a purchase price of $95,000; and repairs of about $12,000; the FHA Appraisal for their home loan came in at $145,000. Or, another way to do the math: for a 3.5% down payment = $3,745; Loan = $103,255; and the Instant Equity was approximately $38,000!!!
This is truly a great time to purchase a home, and the FHA 203k loan may be the very best loan going right now!
Please call us to find out more!
PS - this home loan can help you with your Vancouver WA Condo Purchase as well!
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