Put an offer down

Leila'sMommy

On our first home.

Our realtor called today to say that it is a short sale (this we knew already), and it has two banks involved. Also, there may be a drainage issue with the garage, so when it rains it may have flooding issues. The previous owners converted the garage to a carpeted studio (WHY?!!) and didn't do it properly, apparently.

I guess they are getting a contractor to go over and check it out, assess if it's something that needs to be taken care of prior to move-in. It may not let us qualify for an FHA loan, because of the garage issue. 

What other loan types are out there that don't require a huge down payment? FHA was great because we only had to pay 3.5% down.

Would you walk away from this house, knowing this issue? Assuming there were no other issues?

 

hereonceagain

You have to see if u are ok paying the cost to fix drainage issue.  Our home was $600k and to fix tons of drainage issues we paid $10k which is not huge in relation to the cost of the home.  Also consider if there's any other issues.  Having one semi huge issue is almost a given in my area, but multiple huge things not considered in the cost of the home, I'd pass on.

lil_jen051708

It depends if there is any damage from the improper drainage and how much it would be to fix.

You can get a 5% conventional loan which has less strict requirements for the property's condition. Last May, Wells Fargo offered a 3% down conventional mortgage for first time homebuyers.  Not sure if it's still available but somethin to look into. 

mica178

Ask your lender about an FHA 203K loan.  There's usually a slightly higher interest rate but it's meant for fixer uppers.

Leila'sMommy

Thanks for the helpful responses! We are just now getting into this, and I hadn't heard of a 203K loan before. I will look into it tomorrow! I feel like we are learning more every single day.

biblionerd

It would actually depend for me what type of drainage issue there was. I wouldn't want a garage converted into a studio so i would have no problems if the "drainage issue" was water coming in around an improperly sealed garage door or something like that since to me it would just be a minor issue. now if this is an actual drainage issue that would mean feet of water flooding the garage or water getting in any portion of the house then I would reconsider. We bought a house with a basement that unkowingly floods and it's been horrible. Our next house will be looked over with a fine tooth comb for ANY signs of water damage since this guy missed it. We're downgrading, actually largely because this place has been such a money pit, so it would not be in the budget to tackle a 10k+ issue. It's really up to what you're comfortable with. We've spent one too many nights bailing water out of the basement to ever touch a water problem again!!!