Wednesday September 28, 2022 Capable Home Buyers purchased 508 Robin Court Chesapeake VA 23322. This single-family home is 4 bedroom 2 bathrooms and is about 3,000 sq ft.
This video is the first walk through of the property at the time when we made our offer to purchase.
The property was listed on the market by a bank as a Foreclosure. Capable Home Buyers was the third offer that had been accepted for this property. The first 2 offers were submitted by typical retail buyers that could afford to purchase a home at this price and this size home. Both offers were submitted with Pre-Approvals and were technically considered strong buyers and offers.
When the home inspections were conducted, during the due diligence phase of the purchase, the home inspectors identified major issues under the floor of the home where significant works were required. As a result, the lenders for the buyers withdrew and therefore the buyers were left without finance.
This is common as it is a big risk for a lender to lend money against a piece of security (the house) that needs considerable work. Should the buyer not complete the work or conduct the work satisfactorily, and then walk away from the house, the lender could be left with a house that still needs a lot of work.
The lender will then have to sell this house at a loss resulting in a larger overall loss then acceptable. When you look at these situations from the lender’s perspective, you understand why the lender does not proceed with completing the transaction for the buyers.
As a result, 508 Robin Court could only be sold to a person or firm with a proven track record in rehabbing houses. This is where Capable Home Buyers are experts.
We have that proven track record and we buy houses with issues all the time, however, enough about us, this post is about you, the buyer to help you find the right house.
When looking for a new home to buy, it is important to find a property that fits in your budget, however the home also has to be structurally sound. Often there is a good reason why a house is listed at a low price. Generally, these low priced homes often need work. Doing your due diligence includes getting a home inspection and we encourage all our buyers to get a home inspection.
If the home inspection identifies structural issues, then not all is lost like it was for the previous buyers of 508 Robin Court. These buyers could have pursued getting a quote from an expert to repair the underfloor damage and then pursued structuring a loan from their lender that paid the underfloor repairer directly.
This loan structure is different but not unusual and so certainly available. There is actually an FHA 203k Loan program available for this exact reason.
WHAT IS AN FHA 203K LOAN?
An FHA 203k loan is an FHA insured mortgage which allows homeowners to borrow the funds needed to purchase the home in addition to the funds needed to renovate or modernize the home.
As the saying goes, google is your friend and sometimes the power is in the knowledge of knowing what to google. Don’t be surprised if your real estate agent or lender does not know enough about a particular solution and certainly don’t be upset with them for a lack of knowledge. There are thousands of products on the market just in the finance industry and it is impossible to know them all. With a bit of research however, you can always find what you need and then all you need to do is qualify.
Capable Home Buyers offers homes to retail buyers via our network of real estate agents that list these homes on the market. Most of the homes offered on the market by Capable Home Buyers have been fully rehabbed and move in ready.
We do however also offer homes via our website that have not been rehabbed. Many of these we offer via a program called Seller Finance. To buy one of these homes you need to be able to conduct the work the house needs and have a down payment to purchase. There are no credit checks.
If you’re tired of renting, and you want to own a home in Hampton Roads, but your credit, lack of down payment, or income hold you back from qualifying for a normal bank loan… a “Owner Finance” option may be a great fit for you. And, as we are a part of a major real estate investing group in Hampton Roads, if we don’t have a house you like, then we can refer you to someone who does.