We're trying to buy a foreclosure for our next project. And when I asked the attorney at the title company for some advice, that's what she told us - 'Fasten Your Seat Belts'.
It's already been an interesting ride. We looked at this house about a month ago and thought it had potential. But it had just come on the market and the asking price was way too high. So we waited. Last week, they reduced the price $20,000. We called our realtor immediately and were able to tour it that afternoon, with the guys from Waterhouse Builders and Succhinis Plumbing & Heating. They quickly gave us a ROM (rough order of magnitude) estimate on what it would take to renovate this house (more about that in a later blog!). With their information in hand, we made an offer the next morning.
With the new reduced price tag, there was a lot of interest. Even though we made an offer within 24 hours of the price reduction, we were one of 3 bidders on the property. But good news! We got a phone call the following day that Fannie Mae had a counter offer for us. 1) we needed to close in 3 weeks, 2) we had to agree to a 'Special Warranty Deed' that said we couldn't borrow more than 120% of the property value or sell it for more than 120% of the purchase price for 3 months, and 3) we had to forgo inspections.
What, no inspections? This place has been vacant for some time. Some windows are boarded up. We've heard rumors that there are burst pipes, but because the property was 'winterized', there's no water in the house to see how bad the issue is......just lots of water stains on the ceilings. And who knows if the furnace even works?
What to do? We also learned if we went back with a counter offer to their counter offer....we were opening it back up to the other bidders, who could improve their bids. Oh, and by the way, another new bid was coming in.
So, we had another glass of wine (or maybe it was two??) and decided to take the risk. We already knew we had to redo the plumbing. And we had budgeted for a new kitchen as well. We also knew we needed to fix some issues in the basement. So we had a lot of the bases covered. We agreed to their counter offer. We quickly got an 'accepted' and thought we were off to the races.
Then we discovered the asset manager at Fannie Mae had to approve it. On the bright side, he quickly said yes. But now we learned he doesn't have final approval - it needs to go for management approval, which takes another couple of days.
Sigh.....I have a feeling the turbulence is just beginning!!!! Stay tuned, if we get it, I'll be posting some interesting before pics!