A Foreclosure + a FHA Buyer = A success story!

In the Metro Detroit area two scenarios we are seeing on a daily basis in the real estate industry are the increase in homes on the market that are foreclosures (bank owned) and the growing popularity of FHA mortgages for home buyers.
 

Typically many home buyers who want to purchase bank owned homes have been frightened off by FHA mortgages, feeling that the inspection guidelines have been too restrictive.  Bank owners of these homes have also been slow to offer FHA terms as one of their purchase guidelines along with conventional or cash terms because they were likely worried about the home sale being completed.


Below is a true story of one typical Metro Detroit home buyer who utilized the FHA buying program AND purchased a bank owned home (foreclosure) at a phenomenal price.

Please meet Mr. Steve Cooper:   Steve came to me in November of 2007, ready to start his hunt
for a new home and move out of the rental home that he had been living in.


Steve was very articulate with his needs and wants and also was educated by Mr. Mike Caira of Great Lakes Mortgage Funding about the home buying programs that were available today for him.  It was decided that purchasing using a FHA mortgage with a down payment assistance program would be best for Steve and keep him well within his comfortable payment amount.

Steve and I then set out on the hunt for the right home for him at the right price.   After many weekends and several weeknights of viewing homes, we kept coming back to one particular home in north Southfield.  It had everything he wanted:  Brick, 3 bedrooms, basement, quiet street, garage, cosmetic updates needed, major updates completed.   It felt like “home” to Steve.  As the price on the home dropped even further Steve decided it was time to make an offer on the home.   Now, it was a matter of convincing the bank owner to accept an offer with a FHA mortgage.  As the home apparently would need few, if any, FHA repairs we felt confident going forward and submitted the offer to the bank, with Steve being responsible for any required FHA repairs up to $100.


The bank rather quickly accepted Steves offer, and the process began.  An appraisal was ordered and the value of the home was more than what was needed, and the repair list was given to us.   We started on the items of repair (a couple of trip hazards, one piece of broken glass in the garage window, a garage door opener without a safety “bump up”), had the water turned back on to the home, the furnace fired up and waited for a re-inspection.  The re-inspection brought a couple more items into view (leaking plumbing in a couple of spots) that were quickly taken care of by a savior named Felix.  Inspection #3 was ordered and all went well.

It may appear that all of the items above added up to too much money or too much time to make it worth it, but I can assure you it didn’t.  The repairs cost approximately $250 in materials, 9 hours worth of labor and one round of Starbucks delivered by a lovely young lady named Lauri.

The time frame from start to finish?  28 days.
Twenty Eight Days.   The offer was formally
accepted by the bank owner on January 2nd
and Steve closed on his new home yesterday
January 30th.