Newbie Needs Help on 2nd Deal!!! - Posted by Crash(OK)


#1

Posted by Crash(OK) on October 20, 1998 at 21:11:34:

Mr. Donald,

Thanks for the previous advice. I will take you up on your offer for additional help. Here is where I am at:

The seller agreed to sell for $27,000. I gave them a check for $100 as a down payment, and to tie up the property, with a written agreement (signed by both parties) that very briefly outlines the deal. I will follow this up with a “real”, more detailed, contract.

They do not want to seller finance. I think I can get a first mortgage on my home (70-80% LTV, $2,500 closing costs, per my credit union) to cover the entire purchase price w/ hopefully enough left over for repairs.

My questions:

  1. Are there traditional lenders that will loan money for more than 70-80% LTV on a primary residence? What about other options? Am I missing something?
  2. Is the purchase agreement the only paperwork that needs to be completed before closing at a title company?

I sure do appreciate your help! I understand a lot of what is posted on this site, but it is a little different when you get down to actually doing it. Kind of like pre-game jitters.

Thanks again!

Crash


#2

Newbie Needs Help on 2nd Deal!!! - Posted by Crash(OK)

Posted by Crash(OK) on October 16, 1998 at 23:29:05:

I have been studying mobile home deals, but tonight I stumbled across a single family FSBO house (just my luck), and need some advice. It’s advertised as a fixer upper for $28,300. Market value for similar homes is $40,000+. I am going to see it this weekend.

I can get a first mortgage on my house for the entire price of the FSBO at 6 3/4% w/ 5/8 of a point.

Does this appear to be a potentially good deal? I would probably either want to fix it and sell it outright at market value, or turn around (flip it?) and create a seller financing scenario? (Am I heading in the right direction?)

I know I can sign a purchase agreement and leave some money to tie up the deal, and I can get the loan for the property from my credit union. But then what? I need to know what to do next. I don’t want to jump into this and then end up not doing something right. Is there a “checklist” of sorts to make sure all of my bases are covered?

Any advice, or directions to an article or ???, would be greatly appreciated.


#3

Re: Newbie Needs Help on 2nd Deal!!! - Posted by phil fernandez

Posted by phil fernandez on October 17, 1998 at 07:37:21:

Crash,

The big thing here is to nail down your rehab costs .

Here’s how I would look at the deal :

FMV $40,000
minus rehab
minus transaction costs
minus holding cost
minus my profit


what I can pay for the property.


#4

Re: Newbie Needs Help on 2nd Deal!!! - Posted by Crash(OK)

Posted by Crash(OK) on October 17, 1998 at 12:03:52:

Once I have figured out what I’m going to pay; make an acceptable offer; sign a purchase agreement leaving a check to tie it up; and get my financing lined up -what’s next?

Does the seller set up the closing? Closing costs are determined by…the title company? How do I know I get the property free and clear?

I’m just a little unclear how the whole process works to get the property and still protect myself.

Thanks in advance for any help or guidance!


#5

Re: Newbie Needs Help!!! Answers? - Posted by Mr Donald (NORVA)

Posted by Mr Donald (NORVA) on October 17, 1998 at 21:00:02:

Crash,

You should be in control of the transaction - not the seller.

First, get a contract that suits your needs as a buyer, and use it for your offer. Be sure that it protects you first, and not necessarily the broker or seller.

Realtor contracts are notorious for protecting the interests of their constituency first and foremost - the brokers and agents. The sole purpose of the Realtor contract is to ensure that they get their commission regardless of the outcome of the transaction.

Use your own contract if you can - and have it fully vetted by an attorney at law that specialises in real estate.

Step-by-step: Make offer in writing and signed. Have seller review and sign if acceptable. Take offer to your closing agent - either a Title/Settlement Company or YOUR real estate agent should handle the closing wherever possible.

Make sure your earnest money deposit check with the agreement goes to the Settlement Agent - not to the Broker - or you may never see your money again. (If you use the proper contract, this shouldn’t be a problem).

You set up the closing by delivering the Contract and earnest money as noted above - closing costs are either customary for your area or, better yet, determined by you, on your contract.

The title company is responsible for researching and delivering free and clear title - and you’ll pay for the privilege by ensuring that you have title insurance in case it isn’t clear.

That’s a quick and dirty tutorial for you - e-mail me for more if you have specific questions - or better yet, RTFM on this board - this site has all the answers, if you just care to take the time to look. :slight_smile:

Mr Donald
dlm@bellatlantic.net