Real Estate Life

Saturday, January 16, 2010

layoff

I'm currently working with a client who is a first time home buyer. He and his wife are in the process of buying a home. The buyers and I have found them a home they are willing to buy and have successfully executed a deal with the seller.

This is the second time the buyer and seller have agreed on a purchase price and buyers conditions. The first time the buyer was not willing to commit to the purchase of the property due to issues that had been brought up during the home inspection.

Usually a buyer will request the seller to compromise with the cost to repair the issues since a home and its features are exposed to wear and tear. Doors, carpet, flooring, furnace's... wear out and eventually need repaired and or replaced.

There are 6 ways to approach issues found during the home inspection.

1. Ask the seller to repair or cure the issue. e.g. fix a broken window.
2 Request the seller reduce the purchase price for the cost of repair.
3. Depending on the actual issue the buyer might compromise with the cost. e.g. living room carpet has wear. cost to replace $1500, seller agrees to pay $800.00
4. Buyer rescind their offer and walks away from the deal.
5. Buyer may purchase property as-is and makes the repairs themselves or lives with the issues.

Yesterday evening I received a phone call from the lender of this client informing me the client has been laid off. This is going to present a problem since the lender requires the buyer to have a job.

Now back to the fact that this is the second time the buyer has had an accepted offer for this property. The buyer wasn't interested in approaching the seller about making the repairs and decided to look for another home.

Then after a couple of weeks of looking at homes the buyer realized this home is going to be the best fit for them. Now they buyer and I have approached the seller again with a new offer reflecting a lower purchase price.

The new purchase price is lower than the originally agreed on price since the buyer is gong to purchase the property without requesting the seller to make any repairs or updates.

Instead of requesting the seller to make repairs the buyer plans on obtaining a mortgage higher than the purchase price agreed on between the buyer and seller in order to finance the repairs the buyer would like to have made to the home.

The loan the buyer is planning on using is called a 203k streamline loan. These loans have been around for many years and are more common now that many homes purchased these days are bank owned that are in need of repairs and updates.

Since the buyer decided to look for another home this caused a delay. Then back to the original home to negotiate a new deal created a delay, in addition the buyer chose to avoid asking the buyer to make or assist in repairing the home this caused additional delays, streamline financing takes additional time since the repairs being financed need to be accompanied with quotes, and the fact this deal started just before Christmas/New Years causing even more delays.

The point to all of this is now that the buyer is unemployed the lender will not sell the buyer a loan and this deal will be dead. Had the buyer taken the professional advise given to them weeks before there would have been a chance the original deal could have closed before he became laid off.

There is an additional fact this buyer is in a trade where layoffs are very common and expected. He is probably accustom to this and financially this might not effect them. However the bank doesn't look at it the same way.

You do your thing, I'll do mine!

11 Comments:



  • My page; lotto
    My website - http://lottery-how-to-win.com/

    By Anonymous Anonymous, at 2:37 PM  

  • I like the helpful information you provide in your articles.

    I'll bookmark your blog and check again here regularly. I'm quite
    certain I will learn plenty of new stuff right here!
    Good luck for the next!

    Here is my blog ... remodeling service in west des moines
    my web site - bathroom remodeling in west des moines

    By Anonymous Anonymous, at 3:51 PM  

  • Hi there, its pleasant post concerning media print, we all
    be aware of media is a wonderful source of facts.



    Look into my blog; smog check in national city

    By Anonymous Anonymous, at 4:41 PM  

  • I love what you guys are usually up too. Such clever work
    and exposure! Keep up the superb works guys I've incorporated you guys to blogroll.

    Also visit my blog post ... roadside assistance in claude
    my web page > towing in claude

    By Anonymous Anonymous, at 5:05 PM  

  • It's a shame you don't have a donate button! I'd certainly donate to this superb blog! I suppose for now i'll settle for bookmarking and adding
    your RSS feed to my Google account. I look forward to new updates and
    will share this blog with my Facebook group. Talk soon!



    Look at my site notary services in riverside
    My web site: loan signing agent in riverside

    By Anonymous Anonymous, at 6:46 PM  

  • I think this is one of the so much vital info for me. And
    i am satisfied studying your article. But want to remark on some general issues, The website
    taste is wonderful, the articles is really nice : D.
    Just right process, cheers

    Here is my page ... bathroom remodeling in puyallup

    By Anonymous Anonymous, at 7:33 PM  

  • Whats up are using Wordpress for your
    blog platform? I'm new to the blog world but I'm trying to get started and
    set up my own. Do you need any coding knowledge
    to make your own blog? Any help would be greatly appreciated!


    Also visit my blog; View my web page

    By Anonymous Anonymous, at 12:57 AM  

  • First off I want to say fantastic blog! I had a quick question
    that I'd like to ask if you don't mind. I was curious
    to find out how you center yourself and clear your
    head prior to writing. I've had a tough time clearing my mind in getting my thoughts out
    there. I do take pleasure in writing however it just seems like
    the first 10 to 15 minutes are usually lost
    simply just trying to figure out how to begin. Any ideas
    or tips? Many thanks!

    My web site; Please visit my site
    my webpage: My Site

    By Anonymous Anonymous, at 12:58 AM  

  • This is very interesting, You are a very skilled blogger.
    I have joined your rss feed and look forward to seeking more of
    your excellent post. Also, I have shared your web
    site in my social networks!

    Look into my web page :: www.elderscrollsonline-wiki.com

    By Anonymous Anonymous, at 9:14 AM  

  • This is very interesting, You're a very skilled blogger. I've joined your feed and look forward to seeking more of your
    wonderful post. Also, I've shared your website in my social networks!

    Here is my page: juicers reviews

    By Anonymous Anonymous, at 8:24 AM  

  • All thanks to Elegant loan firm for helping me secure a of $1,000,000.00 USD to establish my Foodstuff supermarket business in different places. I have been looking for a financial help for the past four years. But now, am completely stressed free all the help of the loan officer Mr Russ Harry. So, I will advise any person who seek for funds to improve his or her business to contact this great firm for help, and it is real and tested. You can reach them through- Email --Elegantloanfirm@Hotmail.com-  or Whats-app +393511617486.

    By Blogger Paul Delphine, at 12:09 PM  

Post a Comment

<< Home