Help! In a bit of trouble

[spp]

So I bought a house on bank forclosure with damage to the garage (some idiot drove the car into it) , and the closing date is in 7 days (contingency removed last Friday). My agent just called me and said that the bank won't give me the money unless the garage is taken cared of, and basically I would lose my deposit if that happens. We're going to try and extend the closing date, but does anyone know of good and reliable contractor who can repair this in time? (or know the best way to find one)?

The house is in Newark, CA.

Thanks in advance!

 

[KLin]

Working on kind of a short timeline no?

 

[drnickriviera]

This is why you need to use a line of credit when buying distressed homes. The bank is asking you to do repairs on a house you don't even own. Sorry I can't help with a contractor

 

[olds]

Why can't you do it yourself?

 

[DrPizza]

Originally posted by: spp
So I bought a house on bank forclosure with damage to the garage (some idiot drove the car into it) , and the closing date is in 7 days (contingency removed last Friday). My agent just called me and said that the bank won't give me the money unless the garage is taken cared of, and basically I would lose my deposit if that happens. We're going to try and extend the closing date, but does anyone know of good and reliable contractor who can repair this in time? (or know the best way to find one)?

The house is in Newark, CA.

Thanks in advance!

OMG! Dejavu! This has happened to me. Twice. First foreclosure property, I repaired the roof, etc. Didn't matter; my mortgage broker f'd up. We lost the opportunity + money was wasted.

Second time, 2 weeks before closing, "The utilities have to be turned on; it's in the contract." "They are on." "We mean, you have to turn the heating system on." "That's not a utility!" "You have to turn it on." "It won't come on; it's hot water baseboard and most of the pipes are burst." "Repair it."

So, we tried to repair it. New realtor (the bank holding the property had just switched realtors, she almost immediately had a cash offer after the bank had already settled on a price with us; she was out a couple thousand in commision if we closed): "No, you can't go in to repair the heating system. You need a licensed contractor." "Oh, that's okay, my brother in law is the head of the heating and plumbing department at one of the largest contractors in the area." "Oh. You need to use OUR contractor." "Okay, get me a price." (next day: ) "Contractor was out and got an estimate... $10,000" (I can put in a brand new forced air heating system for about $1500, plus, with the snow on the ground, it was obvious that no one came to the house... it was obvious that this was her latest attempt to screw us out of the house.)

Our solution: we got an excellent mortgage broker - he found a new loan and had us ready to close in 2 weeks. (we now own this home.)

Lessons I learned: even if they say everything is fine if you do the repairs, there are no guarantees you're going to close on the house; you could end up out the money. Do the repairs at the lowest price possible, otherwise see if you can get a new lender who is aware of the problems with the property, although with only 1 week, you might be breaking some sort of record.

 

[Greenman]

Originally posted by: spp
So I bought a house on bank forclosure with damage to the garage (some idiot drove the car into it) , and the closing date is in 7 days (contingency removed last Friday). My agent just called me and said that the bank won't give me the money unless the garage is taken cared of, and basically I would lose my deposit if that happens. We're going to try and extend the closing date, but does anyone know of good and reliable contractor who can repair this in time? (or know the best way to find one)?

The house is in Newark, CA.

Thanks in advance!

Thats a very short time frame to get anything done.
How extensive is the damage? Is it a hole in the wall or is half the garage down? Can it even be repaired in seven days? Could you post some pics?

I'm a contractor at the other end of the Bay Area (near Concord) and depending on how big the project is I might be able to help you out.

You could also try the yellow pages, a big enough contractor can almost always shake lose a couple guys on short notice, though you will pay for that kind of service.

btw, you're agent isn't very good, this shouldn't have been a surprise.

 

[Darwin333]

Originally posted by: spp
So I bought a house on bank forclosure with damage to the garage (some idiot drove the car into it) , and the closing date is in 7 days (contingency removed last Friday). My agent just called me and said that the bank won't give me the money unless the garage is taken cared of, and basically I would lose my deposit if that happens. We're going to try and extend the closing date, but does anyone know of good and reliable contractor who can repair this in time? (or know the best way to find one)?

The house is in Newark, CA.

Thanks in advance!

You don't have wording in your contract that everything is basically null and void if you can not obtain financing (which should include getting your deposit back in full)? If not, fire your agent.

 

[d33pt]

you should've negotiated for the bank to repair the damage before you dropped contingencies. i agree with the other guys though, your agent and loan broker suck. i just bought a foreclosed out and it had mold damage and a broken furnace. the bank paid $12k to repair all the mold damage, $4k for termite damage, and $2k credited to me for the heater. it's hard, but possible to make them budge. you have to have a good agent, and don't be afraid to walk away if they say no. it's a buyer's market.

 

[Greenman]

Originally posted by: d33pt
you should've negotiated for the bank to repair the damage before you dropped contingencies. i agree with the other guys though, your agent and loan broker suck. i just bought a foreclosed out and it had mold damage and a broken furnace. the bank paid $12k to repair all the mold damage, $4k for termite damage, and $2k credited to me for the heater. it's hard, but possible to make them budge. you have to have a good agent, and don't be afraid to walk away if they say no. it's a buyer's market.

It all depends on the property and the market. If the property is priced well below market value the bank isn't going to do anything, someone will buy it, and soon.

I've looked at a lot of foreclosed property, thinking I could do a quick face lift and flip it, but I could never make the numbers work. Everything I looked at sold for full market value, even the the property's that needed a great deal of work. The very best I could do on any of them was buy myself a job, it just wasn't worth it.

 

[Sphexi]

Pardon me for being stupid (and never having bought property), but why would the bank/lendor care what damage there is? I understand that there's always a possibility that someone would default and then the bank has to sell the property, and it'd be harder with damage I suppose, but people are always looking for deals. Obviously with damage and it being a foreclosed property it's not selling at full value, so I'd think the bank wouldn't have a problem putting up cash for it, no matter the condition, knowing that the buyer is likely to fix and sell it, thus paying the loan off fairly quickly.

 

[Greenman]

Originally posted by: Sphexi
Pardon me for being stupid (and never having bought property), but why would the bank/lendor care what damage there is? I understand that there's always a possibility that someone would default and then the bank has to sell the property, and it'd be harder with damage I suppose, but people are always looking for deals. Obviously with damage and it being a foreclosed property it's not selling at full value, so I'd think the bank wouldn't have a problem putting up cash for it, no matter the condition, knowing that the buyer is likely to fix and sell it, thus paying the loan off fairly quickly.

Most banks won't fund a loan on a house that has section 1 termite problems or structural defects. There is the risk that the problem is larger than it appears, or won't be repaired. Either one could greatly reduce the value of the property, making the loan more likely to default.
Generally those issues are handled by the seller and paid for out of escrow.
A foreclosed property is often distressed, and in the rare case that it's priced below market value, it would get snatched up by a cash buyer the day it's listed. Most agents have an investor or two they can call when they find a good buy.
Thats the way it works here in the Bay Area anyway.

 

[spp]

Originally posted by: Greenman

Originally posted by: spp
So I bought a house on bank forclosure with damage to the garage (some idiot drove the car into it) , and the closing date is in 7 days (contingency removed last Friday). My agent just called me and said that the bank won't give me the money unless the garage is taken cared of, and basically I would lose my deposit if that happens. We're going to try and extend the closing date, but does anyone know of good and reliable contractor who can repair this in time? (or know the best way to find one)?

The house is in Newark, CA.

Thanks in advance!

Thats a very short time frame to get anything done.
How extensive is the damage? Is it a hole in the wall or is half the garage down? Can it even be repaired in seven days? Could you post some pics?

I'm a contractor at the other end of the Bay Area (near Concord) and depending on how big the project is I might be able to help you out.

You could also try the yellow pages, a big enough contractor can almost always shake lose a couple guys on short notice, though you will pay for that kind of service.

btw, you're agent isn't very good, this shouldn't have been a surprise.

The damage is just on the right side, there's stucco damage and sheetrock damage, but i don't think it damaged the foundation

outside
inside.JPG

So my agent called the seller's agent, and they agreed to extend the closing date by 1 wk. It's still a short notice, but hopefully it's enough time to get it repaired.

To answer some questions: the offer is as is, and it was listed under market value. The as is clause basically excludes all possibilities for them to fix the house for me. I'm just a little shocked that the lender doesn't know that it's an as-is offer and still try to push for the repair.

 

[BoomerD]

Personally, I wouldn't drop a dime into the place until the loan is approved and it's closed escrow. I WOULD however have it in the loan agreement that once it has closed escrow, the damage would be professionally repaired by a licenced contractor, and include a couple of bids for the work. It would be far too easy for you to get screwed out of the money you put into the repairs, should you, for some reason, NOT get the loan, or the place not close escrow.

 

[spp]

Originally posted by: BoomerD
Personally, I wouldn't drop a dime into the place until the loan is approved and it's closed escrow. I WOULD however have it in the loan agreement that once it has closed escrow, the damage would be professionally repaired by a licenced contractor, and include a couple of bids for the work. It would be far too easy for you to get screwed out of the money you put into the repairs, should you, for some reason, NOT get the loan, or the place not close escrow.

yea i guess i'm learning as i go since this is my first purchase. the seller asked for 3% deposit and i accepted.

 

[Greenman]

Looks like you need to replace the cripples and king stud, then patch the stucco. I can't tell if the garage door can be saved or not, it looks like the hardware and one panel are bent.

 

[spp]

just want to give a little update for people who cared to read the thread.

my agent helped me extend the closing date by 2 more wks, and i found a couple of contractors who said they could finish most of the work by this wednesday (enough to show the lender that it's been taken cared of). The one I went with already started the work today and everything seems to be falling into place. I'm much relieved right now although I won't be completely until the closing date when I get the key.

Thanks for everyone who pitched in (and Greenman for the recommendation even though it didn't work out). I learned a great deal from this experience.

 

[BoomerD]

so you spent your money to fix someone elses house? You better hope you get the financing!