Home Buying - first timers?

Question

My fiance and I are looking to buy a house that's down the street from his mom's. His mom's house is a ranch style home, and was appraised at $150K, drive-by. The house we're looking at is a two story and a REAL fixxer-upper. It's a bank foreclosure and has been sitting for about a year and a half. The realtor said it's going for $100,000. Would we be ignorant for telling them that we'll give them $55-$60K for the house?

The house is in need of a new roof, updating (still has shag carpeting in some rooms), and just general housecare.

Also, because my credit isn't the best, would it be dumb of me to try to get on the loan WITH my fiance, who has great credit? Or should he just get the house on his own?

Answer 1

I don't know a lot about home buying but I do know you should research the market area. Find out what other homes are selling for near by and what matches the home you are looking at. You can find out sale information at your local Assessor's Office. Take your time so you make the right decision. As for your credit, I don't have an answer for that.

Answer 2

You should find a mortgage "Broker" and get pre-approved to purchase any house that you plan to purchase. You will need W-2 forms for the last 2 years and well as fed income taxes for the last 2 years, pay stubs covering one month for each. You will also need 6 months bank statements for each account that you have in savings and checking accounts, to include any 401k plans you are enrolled in. Give these documents to the "Broker" he will have you fill out an application, run a credit check for the both of you. He will tell you if it is better for you and your finance to be on the loan or just your finance. He will base his decision on the credit scores from each of you. After which all of you can sit and map out a plan that is best for you and your finance.

As far as the offer, make the best offer you can, also add to the offer that you want the first right of refusal. This way if they get a better offer you can always add to your offer or match the offer that someone else make. Make the purchase offer in a as-is condition.

Before you make your offer try and get into the property, make a detail list of all the items that you think is wrong with the property. Make sure the fact that the house has been standing empty for the past year and a half is part of your list. Once you have gotten a list of things that are wrong with the house subtract that from the listed price, this should be what you pay for the house. You may offer less, which is always a good idea. Make sure that you give them your pre-approval to purchase a property so that they will know that you are serious about purchasing a property.

You would want to ensure that nothing is seriously wrong with the property and that the things that are wrong can be repaired by you over a period of time.

You might also tell the agent that you want to be there when the offer is made so you can defend any questions that might arise as to how you came up with the price, agents generally work for the seller. Agents want a high price because they work for commissions and the higher the price the more they make.

Now don't get all excited and go find a buyers agent as some would suggest, just be there when the offer is made, common sense offers are good for all concerned and the bank will see that.

I hope that this is of some use to you, good luck.

"FIGHT ON"

Answer 3

Let answer some of your guestions: 1. It is not Dumb to go on the Mortgage - ok Lenders will take whom ever makes the most money first - Hopefully your Finance has the better job, and the most income....if you have the most income and lower score - they will go with you. I do know of a few companys that will take the higher score regardless of who makes the income, but the normal company looks at income and credit - If you have alot of judgements against you, normally the judgements have to be paid off at close - Collections can stay open (again it depends on the lender your broker submitts your loan to.). Of you can have fiance do the loan - but you do a Quick Claim Deed after the fact, and put your name on deed & title. Your name will not be on the Mortage persay with the lender, on the paper work and bill, but you will be on title and deed. You do this by going to your local court house, and process the paperwork there, pay a 25.00 fee, and they file it....

2. Have the home inspected - - since it has been vacent this long - I live in Indiana, and the winters are harsh here, not sure where you are from, but need to make sure pipes did not freeze, that the furnance, a/c etc are in workign order OR YOU WILL BE PAYING IN THE LONG RUN, MORE MONEY THAN THE HOME IS POSSIBLY WORTH... All this will take money, so offer low - or have them put into the purchase agreement a new furnance, etc...and see what happens,,,,when they close the money can go into escrow thru a title company....if there are contractor bids to do the work....There is also financing for repais called USDA Guaranteed Rural Housing Program, thru Wells Fargo - chekc your state. Other companys offer it Countrywide does too - it is more paper work for your Broker etc - but - it is a good program. It is the FHA 203 (k) Renovation Loan. Check it out at http://www.203K.net you can also do a www. search ont he 203 k plans - Good Luck

Answer 4

If it has been sitting for that long, the seller will be motivated, but your real estate agent should be your best source for what the right price is (if you are working with a good one). It is usually best to get an inspection of the house and bring in a contractor (unless you will be fixing it up yourself) before making the offer so you have a real sense of costs and issues going in. At the end of the day, the right price is the highest you feel comfortable departing with and the lowest the seller is willing to take.
If you can get on the loan, it will only help your credit rating, so you might as well try.

Answer 5

I wouldnt say it would be ignorant you can offer whatever you want to, but someone else might come along and offer more (especially the way the real estate market has been lately). I would suggest taking into consideration what it would cost to fix what needs to be fixed and at the least subtract that from the market value or appraised value to determine your offer.
As far as the loan goes, I would ask your mortgage broker to run the pre-qualification both ways (just him on the loan and then both of you) and see what prices or interest rates you are quoted. But it's also a personal judgement call as far as legal rights go and ownership of the prospective property (if for some reason you two dont get married)

Answer 6

No offer is bad EVER! It may be difficult in finding a Realtor willing to make the offer, because they are paid from the sales price. But you will never know what they will accept for the house until you ask them.

If your credit is challenged I would recommend your fiance' apply for the loan with a mortgage broker and you should be on the title.

If you are on the title to the property you will have full ownership rights. Best of all the house is not on your credit report, but you are still 50% owner. This is a HUGE benefit to you, because your credit will not effect the ability to purchase the house, moreover your budget will not be affected on paper.

If the house IS on your credit report than banks, credit card companies, and retail stores will consider you to be less likely to be able to pay them because you have a mortgage bill to pay.

So, if your fiance' is the only one on the house that gives your household two credit reports to use to their maximum potential instead of one. Both you and your husband will be able to maximize your credit reports based on your specific incomes.

Banks, are basically looking for 50% of your income for debts that would apear on your credit report. So if you both are tied to the mortgage both of your incomes are limited by the bill.

I have helped people in these types of transactions many times over.

Answer 7

I may be able to assist you, I am a mortgage broker who works with over 100 lenders nationwide and offer several programs that will fit almost any situation.I specialize in Re-Fi's, Purchases, Home Equity Lines and Home Owners Insurance. Please feel free to contact me [e-mail] I will go through everything with you and answer any questions you may have about the process. This is at no obligation to you and if nothing else will educate you on how everything works and what you qualify for exactly! I look forward to hearing from you! ~Joseph

Answer 8

You ask "what is the bottom line on what the seller will take"?
NEVER,NEVER buy a house with someone you are NOT married to
opens a big legal financial can of worms if it doesn't work out
whatever is bought "before" a marriage goes to the person who bought it, and brought it into a marriage
get married 1st, then buy