Foreclosure sale with RD financing.

By
Real Estate Agent with Keller Williams Realty SC44235

Lessons learned on what TO DO and what NOT TO DO!

First of all, don't do it! Now that was the easy part. Second of all, DON'T DO IT!

Always do the due diligence prior to submitting a contract and don't use RD for the loan. I knew better then trying to get a foreclosed, as is, property to close with an RD loan. But trust me, it wasn't my idea nor my guidance.

An RD loan is the most difficult to use when dealing with repairs on a home in good shape, let alone a property that needs some TLC. Even though the home appraised well above the sale price, RD continued to be the beast of burden and the APPRAISER was no help. The first appraisal made no mention of some items, so when we thought we were finished, in comes another appraiser from the same company and rips the house a new ars and acted like a contractor. Lesson learned, if you don't think it needs to be repaired, REPAIR IT!

DO use a good lender that knows the "finer" details of an RD loan and has the CLIENTS best interest in mind and not be so focused on getting a loan, but the best loan for the entire deal. RD wasn't and isn't the loan of choice and to top it off, the client even turned around and said, "Jeez Mike, if I knew it was like this, I would have done FHA or something else".

Foreclosures and Short Sales require the buyers to be prepared to come out of pocket for repairs, no matter what the loan product is and they also need to be aware that there is a heavy risk involved with spending money on something that's never guaranteed to close.

 

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Rainmaker
123,931
Chris & Maria Skrip
RE/MAX 1st Advantage - Beaufort, SC
Beaufort, Bluffton, Hilton Head, Sun City SC

Challenging one, but good learning lesson on RD and Foreclosures.

Dec 11, 2008 03:41 AM #1
Anonymous
Bob Cummins

Mike:  Thanks for invite.  One could become addicted to this very easliy.

Jan 11, 2009 08:56 AM #2
Rainmaker
176,262
Maya Thomas, Broker
Tampa, FL
Please see my client recommendations.

Thanks for giving us the heads up on who not to do business with.

Feb 27, 2009 02:11 PM #3
Anonymous
lexi cooper

i justwanted to vent, we finally found our dream home and we were gonna make a cash offer but someone else made a offer a little higher than ours but they are doing a r d loan, thebank excepted their offer even though the financeing for them may not go thru, i thought cash talked louder.

Jul 19, 2011 11:49 AM #5
Rainmaker
67,309
Mike Sackman
Keller Williams Realty - Beaufort, SC
Realtor, Broker ABR, CRS. Closer!

Well that is a bummer!! Were the offers submitted together? Some banks don't look at anything but the bottom line if 2 offers are in front them (my opinion), and even though your cash offer is head and shoulders above the other in "risk" to the bank, I'm sure they didn't even look at financing. At a minimum, they should have come back to both offers and asked for your highest and best offer, at which time you have the chance to amend your offer amount.

Don't lose faith though, if the accepted offer falls through at any point, keep your offer on the table until it closes.....you never know these days!!

Jul 19, 2011 12:56 PM #6
Anonymous
lexi

thanks for responding. it sounds awfull but we hope it falls thru! i dont understand the r d loan thing, its for low income? people who dont allready have a home? this home is a forclosure its missing all appliances, light fixtures counter tops cielings have been leaking, how do these people afford to fix all of this out of their pockets? plus its in a high priced tourist town.

Jul 19, 2011 05:12 PM #7
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Rainmaker
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Mike Sackman

Realtor, Broker ABR, CRS. Closer!
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