I'm renting a house from a relative & intend to buy it. Who pays for the appraisal & what order/steps do I take to get things rolling w/bad credit? I don't just want to do a comparison on other houses in the neighborhood b/c this house needs a LOT of work done to it so it would work in my favor if it is appraised on the lower end. The seller (my aunt) asked me what I thought would be a fair price & if I checked to see how much other houses in this subdivision were selling for...but like i said, this house needs a lot of work, so it's not fair to do a comparison. Any suggestions on how to proceed??
I don't know whether we should contact a mortage company first, or get the appraisal 1st. Or since we have bad credit, should we contact a company that help people w/bad credit 1st?
HELP!!
2007-11-29 16:10:30 · 6 answers · asked by mardix27 3 in Business & Finance ➔ Renting & Real Estate
When buying a home, the buyer usually pays for the appraisal in the closing cost's (sometimes called points). There is no way to avoid the appraisal and they always do a comparison to other homes in the area to make sure that the bank is getting a good investment for the money.
Your first step should be to contact a mortage broker in your area, and try to get pre-qualified. You don't need a real estate broker, but it is a minimal security issue for you. They will inform you of all of the local laws that need to be met in regards to test's, as well as inspections that need to be performed.
When you contact the mortage broker, they will ask your permission to run a credit check, and you need to tell them about your current credit situation. They may need you to give them certain documents, ie... bankruptcy papers and things like that. they will also want copies of tax forms and W-2's. Other paper work that they need, they will tell you about. Be honest with them about your bad credit, it is thier job to find you the right financing company regarding you current credit rating. A good and honest broker doesn't charge you for anything up front. They all get a commission from the lender. If they want money from you, find another broker.
You may need to come up with a deposit for the purchase. This deposit is known as an ernest payment. That payment is made to the real estate broker.
Good Luck.
2007-11-29 16:31:30 · answer #1 · answered by Anonymous · 1⤊ 1⤋
1. Get your financing in order first. Be sure you can actually get a mortgage
2. Have your aunt call in several realtors and ask them to price the home. It isn't the same as a bank appraisal but they can look at the market AND the condition of the house to come up with a fair price. If you all don't sign anything you aren't required to use them as a selling or buying agent (or pay commission).
2007-11-29 16:46:27 · answer #2 · answered by RLW 4 · 1⤊ 0⤋
If you have bad credit, you might approach the owner about using owner financing over a period of say 10 to 20 years. The owner would accept a monthly annuity payment (probably through a company that does this sort of thing). This gives the owner a steady stream of money and allows him to have a favorable interest rate. Of course, you will need to be able to meet your contractual obligations.
Normally, you can increase your payments to take ownership of the house quicker. At first, most of your payment would be used to pay interest, but toward the end of the payment schedule, most of the money is applied to principle.
If the owner is agreeable, you should find an attorney who can draw up a contract that you both can agree to and also a company that can act as an intermediary to receive and disburse your payments. This way no one needs to deal with fussy banks, work orders, and credit issues. I suspect that you could agree to a fixed interest rate, or base it on some well-defined index.
You can also re-establish a credit rating using this approach.
2007-11-29 16:24:23 · answer #3 · answered by Skeptic 7 · 1⤊ 1⤋
i would suggest contacting a mortgage lender and get preapproved that way you know how much you can afford.. you also will need a realtor, because they know the ins and outs of real estate and can help you every step of the way...if you have bad credit it is always good to clean it up first especially if you have a lot of debt, some mortgage lenders can help you with that to...here is a good site with tons of home buying information.. good luck
http://www.goduckcreek.net/
http://www.goduckcreek.net/HelpCenter.html
2007-11-29 23:18:29 · answer #4 · answered by Pure Genius 3 · 1⤊ 0⤋
look for a mortgage company first....why pay anything else out of pocket for appraisals or inspections when you may not even be able to buy the house..
2007-11-29 16:13:22 · answer #5 · answered by bailie28 7 · 1⤊ 1⤋
check out fixthiloan.com, they have lots of free articles on home buying
2007-11-29 17:14:50 · answer #6 · answered by Anonymous · 1⤊ 0⤋