I just put an offer in on a house... - PeachParts Mercedes-Benz Forum

Graplr · #1 04-17-2009, 09:31 AM

So as some may know I just got engaged a couple weeks ago. Well last night we wrote up an offer on a house. It is a fairly lowball offer but the house has been on the market 9 months, is in the foreclosure process and has had no offers on it yet.

It is my fiances first time buying but I've owned a couple houses before. Neither of us owns right now so we have that going for us in the negotiations process.

The current loans on the house are extremely upside down. The house was purchased in 2005 for $515,000. It has 3 mortgages on it and it was the typical shady subprime lending that went on during this time where the 2nd didn't notify the first and the 3rd didn't know about the 2nd. It was originally listed last year for $495k. Over the months it has come down to where it is at now at $349.9k. We wrote up a clean FHA offer (we're preapproved) of $290k and have no contingencies (other than an inspection) and are not asking for anything. My thought process was to try to make it as clean as possible for the banks to just say yes on the short sale process.

The house was custom built in 86 on 4.25 acres. It is in a tiny wooded community with natural lakes and wetlands completely surrounded by a 2nd tier suburb of St. Paul. The house has ~3300 ft2 with 4 official bedrooms/3 baths. Best of all there is a heated detached 3 car garage for my shop (along with an attached 2 car). Last night when we were on the deck there was a deer in the backyard.

The house does need some work but the solid stuff is all there. Central air and furnace are pretty new. Carpet, paint, appliances, some drywall/tile work in the bathroom, a good amount of landscaping are just some of the things that will need immediate attention. Eventually the entire kitchen will need to be redone but it will do for now. The kitchen, front outside makeover and landscaping will probably be the biggest $$ factors.

We are organizing all the paperwork today to get the offer officially submitted to the buyer and the banks. We are using the listing agent as our agent as well which I think in this scenario is the best option since she knows all of the history and will work a bit harder to make sure our offer is top notch before it goes to the banks for the short sale process.

We put $2500 earnest money down and a close date of 6/30 but realize that may be pushed back as it could take awhile with the short sale negotiations.

The sellers have completely moved out and have relocated to a different state and have just walked away from it.

I really like this one and hope it goes through but am totally expecting a counter offer.

Any experts have any advice/thoughts?

#2 04-17-2009, 10:14 AM

I have to agree with el presidente DO NOT EVER buy a home/car or any major investement before you are married. I have seen way to many friends get burned this way belive me its a total mess without that legally binding marriage.

Graplr · #3 04-17-2009, 10:15 AM

I understand what you are saying. But trust me, I am not jumping back in to the same thing as you put it. If they accept this offer we will take this house because this house will be a steal (which we will easily be able to afford as the payment will be less than 25% of our take home income). The only thing the house needs to be liveable is some paint and a couple of appliances we will get off of craigslist for cheap. The rest of the stuff can wait. If they do not accept this offer we will wait for another house we are interested in to come along which may be awhile. My previous mess was very different as she (and I, I guess since I allowed it) would spend spend spend and our house payment was about 45% of our take home income. My fiance and I have paid off debt and saved.

We are planning on getting married at the end of this summer in perhaps September. So I will not be moving in until that point which will probably be around when we take posession anyways as the process will most likely take awhile.

I have busted my hump to get to where I am at now but I/we have done things very differently this time around and are both prepared financially, spiritually, and mentally to make this step. Everything will be done with cash with the exception of the only loan on the mortgage.

I understand the advice Dave gives on waiting one year after you are married before you buy a house together but we are not the typical couple. We are both a bit older than the typical couples getting married. We both have our finances in a row and I have a son so moving a couple times in a year would not be ideal for him. As soon as we are married I will move out of the home I am currently in (I live with the guy who owns the house) and my son and I will move into this house (assuming we get it).

I realize nothing is 100% certain but I have grown a lot and learned a lot from being married once already. I would not put myself into a situation if my ducks weren't in a row and I was not as certain as I could be that this would be a doable financially according to Dave's advice.

Mistress · #4 04-17-2009, 10:27 AM

I like the heated garage part.....can I rent space for the 560 SL during the winter?

dynalow · #5 04-17-2009, 10:28 AM

Don't overlook the obvious...

For her and maybe you as well, possible first time homebuyers credit...

Immediate refund by amending your/her 2008 1040, if alreeady filed.

http://www.irs.gov/pub/irs-pdf/f5405.pdf

Happy home ownership.

ramonajim · #6 04-17-2009, 10:30 AM

Speaking from limited but recent experience (closed on two foreclosed houses in the past six months - one for me & Darling Wife, the other for her folks).....

The selling bank (or banks in this case) is where the level of stupidity to be dealt with in doing a deal gets determined. We had to jump through a whole bunch of silly, some just plain stupid, and a couple that felt borderline slimy because, quite simply, the selling bank calls the shots.

What was mind boggling was that each of the two houses had been bank owned and empty for over a year. Common sense says the selling bank and their agent would be bending over backwards to get 'em the hell off their books, but I guess common sense isn't what got these guys into their current mess.

Your best weapons in dealing with this are likely to be your agent and your settlement attorney. I highly recommend an honest to goodness attorney (not just a settlement company paper pusher) - and whatever you do, don't let the seller pick the settlement company! Given three loans (and therefore (at least) three liens against the title) I'd be prepared for all kinds of chaos trying to establish a clean title.....

tompaah7503 · #7 04-17-2009, 10:33 AM

Guess I'm a bit on the cynical side but I'd say the opposite.. get a house before marriage, better yet before meeting someone at all.. that way the house is yours no matter what happens to the relationship.

dynalow · #8 04-17-2009, 10:46 AM

Quote:

Originally Posted by ramonajim

The selling bank (or banks in this case) is where the level of stupidity to be dealt with in doing a deal gets determined. We had to jump through a whole bunch of silly, some just plain stupid, and a couple that felt borderline slimy because, quite simply, the selling bank calls the shots.

What was mind boggling was that each of the two houses had been bank owned and empty for over a year. Common sense says the selling bank and their agent would be bending over backwards to get 'em the hell off their books, but I guess common sense isn't what got these guys into their current mess.

Yes, the owner bank is the biggest impediment in the process. They just are trying to hold out for every last nickel they can get.

And. like RJ said, with 3 liens on the house, it will take a long time to get the deal done. Hope you can wait a while.

rs899 · #9 04-17-2009, 10:54 AM

Quote:

Guess I'm a bit on the cynical side but I'd say the opposite.. get a house before marriage, better yet before meeting someone at all.. that way the house is yours no matter what happens to the relationship.

Yup...having been burned by my ex who got herself a free house, I say lock it up yourself, if you can.

Graplr · #10 04-17-2009, 11:31 AM

Quote:

Originally Posted by dynalow

Don't overlook the obvious...

For her and maybe you as well, possible first time homebuyers credit...

Immediate refund by amending your/her 2008 1040, if alreeady filed.

http://www.irs.gov/pub/irs-pdf/f5405.pdf

Happy home ownership.

Unfortunately we won't be able to get the 8k credit since she makes too much to qualify for it.

Edit: If we can use 2008 income we might slide in under since she made less in 2008 since she just started out in practice during the middle of the year. So if we can back file using 2008's we may get some, but if we have to wait until 2009 taxes we definitely won't get any. Can anyone clarify this a bit more for me??

Graplr · #11 04-17-2009, 11:32 AM

Quote:

Originally Posted by dynalow

Yes, the owner bank is the biggest impediment in the process. They just are trying to hold out for every last nickel they can get.

And. like RJ said, with 3 liens on the house, it will take a long time to get the deal done. Hope you can wait a while.

Yep, I'm planning on it taking awhile. But 2 of the 3 loans are with Chase, so that may help.

ramonajim · #12 04-17-2009, 01:49 PM

Ouch.

Chase was the selling bank on one of ours. They suck. Good luck.

Mistress · #13 04-17-2009, 01:55 PM

PM Medmech for financing.....he has done two of my loans.

dynalow · #14 04-17-2009, 02:32 PM

The IRS set forth rules for allocating the credit between unmarried taxpayers in Notice 2009-12.
The notice was issued before the limit was raised to the $8,000 maximum, but you can rely on the advice given for allocating the credit.. The examples cover most common circumstances. Hope this helps.

http://www.irs.gov/irb/2009-06_IRB/ar07.html
Caveat: You MUST close & pass title before December 1, 2009.

LUVMBDiesels · #15 04-17-2009, 02:57 PM

How long before the house goes up for auction? It might be worth it to wait and see if you can get it then. At the auction all the liens drop off and you get a Sheriff's deed. That's how I bought my house in NJ. It had three mortgages, but my deed established clear title which was good because when I went to sell it one of the former lien holders tried to muscle in on the deal. I just waved my Sheriff's deed at them and made them go away

If you don't want to wait, I second the opinion that you need a lawyer who KNOWS the REO process and can cut you a deal. Most of the negotiations will be lawyer to lawyer and not really involve the real estate agent.