Found A House, But Would Like Some Opinions!

Discussion in Mortgage & House Payments started by kaileebee93 • May 24, 2016.

  1. kaileebee93

    kaileebee93New Member

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    Me and my husband decided last year that we were ready to move Out of the City and buy a piece of land, and FINALLY after what seems like forever of searching, we found a place we want! We've talked to the owner and everything, but I feel like being a younger couple (22 & 25), we may get taken advantage of. So I'm trying to do our best at being educated before any money goes into the equation! ... So here is the situation, please let me know what you think!

    To start off, it's in Missouri, since all states have a different market.
    -It's a metal house, definitely a fixer upper (that's a big reason we chose it).
    -It sits on 7.9 acres, but only 2 acres are cleared and the rest goes up a hill and then flattens some uphill.
    -It's a technically 2 bedroom, one bath. (One of the rooms is a loft). It's smaller than what we are living in, but it's perfect for our small family and worth it to us for the land.
    -We know the yard floods real bad and comes into The House if it's bad enough, because we've been real good friends with the neighbors of this house for a while. But, the owner has failed to mention that, and I don't know if that's on purpose or he just was waiting. (Its a for sale by owner house, no realtor involved.) Now, I'm uncomfortable moving in until the flooding issue is resolved. I've talked to a few people, and they said build a flood wall or build some kind of trench that you fill with gravel around the house to redirect the water. Opinions on that?
    - Other than the flooding, most of the work is just vanity which is fine. One room needs the ceiling replaced (especially since it would be my daughters room), but from what I can tell the ceiling shouldn't be more than a $1000 or so problem.

    So, knowing all that.... The owner says he would take $52,900 for it. With a down payment of $6000, and the rest of the payment as rent to own. So, my question is, is that a good deal and should we go ahead with it?
     
  2. Theo

    TheoWell-Known Member

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    It's really hard to say or give you advice, but once you said 'flooding' then the red flags came up. I think by the sounds of it, it will cause more issues in the long run, and not only that when you want to sell the issue will remain and thus the property value won't increase.

    Building a flood wall can't be guaranteed, and the owner doesn't have to tell you anything unless you ask. If you ask and he lies then you could sue him later on, but that's more hassle than it's worth. Most banks and lenders would survey the property before they lend money on anything, and if they did would may refuse a loan because of the flood issue. If they refuse then it would be advisable to steer clear; if a bank won't lend on it, it's because it's high risk.

    Also consider your house insurance, if you do know about the floods and don't declare it then it will void any claims you make, besides it will push up your premiums. If you really want the place, get an independent surveyor, but by the sounds of what you have said, I would look elsewhere.
     
  3. kaileebee93

    kaileebee93New Member

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    I know flooding is a big issue, but I'm just in love with the property and think if I could find a way to resolve it, it would be worth it. It's just a matter of finding a correct way to fix it (if there is one). Because I don't want to raise the house if I don't have to, and I knew the wall wouldn't be the best decision. But, when I showed a contractor the pictures he said it would be an easier fix than most people are making it out to be. At the same time though, I don't know who to trust. Plus, I feel like if I did decide to buy it, that would be grounds for a lower price. I wouldn't need a loan from a bank, but I did plan on getting the place appraised and stuff along those lines. And also planned on getting home insurance if we did go through with it. I'm defintely mentioning the flooding to the owner the next time I talk to him to see what he says, my husband was the one thats been talking to him and I've forgot to tell him to ask about that. My grandfather is a realtor, and he's going to look at the property with me as well.

    I've just spent over a year looking at properties, and this is the only one that we both adored and isn't wayyy overpriced. So, I'm really hoping that we can figure the flooding issue out. :/
     
  4. Theo

    TheoWell-Known Member

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    That's great that your grandfather is a realtor and I would listen to his advice over anyone else, because he has nothing to gain. You could easily ring up an insurance company for a potential quote to see what the cost would be, because if there is a history of flooding some won't even insure or have such a high excess.

    I know sometimes you can fall in love with a property, but you have to be practical too and look to the future. That's what I learned. I bought a property near a beach because I loved the idea, but then sea salt damage to the property and constant sand cost so much more to maintain than we ever realized.The houses next to us got flooded too, and it cost them a lot of damage because the pipes would burst and over fill. I helped them clear up and it was heartbreaking to see so much damaged.
     
  5. kaileebee93

    kaileebee93New Member

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    You are most definitely right, I can't let the love for the property get in the way of being practical and screw myself and family in the future. That's why I'm getting as many opinions as possible, I don't want to do anything stupid. I just don't want to pass it up if it is fixable because it would be a better place for us if the flooding weren't an issue. I'm going to check out my options on this property before I completely move on, but I'm not going to go for it if it'll hurt us in the future. So I will definitely take what my grandfather says to heart, since he obviously would know far better than me. And I'll be asking the owner about the flooding, because I never saw it first hand so I'm not sure how bad it gets. And then I'll be taking your advice and calling an insurance company to get a quote. I know the owner lived there for a real long time before he got health issues, so I'm hoping he's honest with me and lets me know what he experienced while living there.

    I'm sorry to hear about your beach property though, and the ones who suffered from it! That's horrible. :(
     
  6. Theo

    TheoWell-Known Member

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    Nearly every property can be fixed unless it's cheaper to knock it down and rebuild. One thing you can do is see what questions the insurance company asks, and write those down to ask the owner. You can honestly say these are questions that the insurance company wants to know the answers to, because they do come up with questions you may not have thought to ask, that they deem important.

    I know my brother was refused a mortgage on a flat above a shop in a High Street, because they thought that was too risky with break ins etc. You never know what these companies are thinking.
     
  7. kaileebee93

    kaileebee93New Member

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    I didn't even think about that. Thank you! You have seriously been so helpful. I will for sure be doing that! I want to be as educated as possible, I own the house I currently live in but I got it in an auction since it was a foreclosure and it was a solid house, so I didn't need as much information. So, I'm just trying to get as much info as I possibly can so I don't do anything stupid!
     
  8. xTinx

    xTinxWell-Known Member

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    I do not live in the United States and have no first-hand knowledge of real estate issues there. However, based on what I have extracted from your post, it appears to me that you will end up dishing out more money just to get the house fixed. Not to mention you have to shoulder the cost of building additional infrastructure in a bid to make your home calamity-proof. Perhaps you should exhaust all your available options, look for other homes and compare prices, before sealing the deal. Hopefully you'll find one at basically the same price but without the extra costs.
     
  9. kaileebee93

    kaileebee93New Member

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    I'm still looking at other options, but I planned on dishing out money to fix a house period. I wanted a fixer upper so we could make it our own. I'm not worried about the money, unless I'm getting screwed. Which, to me, if the flooding were to be fixed, I wouldn't be worried at all about the other stuff because I went into this knowing I was going to have to redo any house I buy because I don't like the contemporary/modern build of houses in the united states, I want something unique that I can make into my own. If that makes sense. Lol. I've compared prices and looked at the market, and it's an amazing deal minus the fact of the flooding. Places that are less than this are double and triple the amount in price, so that's one of the reasons I'm not just flat out giving up on this house. I've looked far more than I've wanted to. haha. The house itself is structurally sound from what I've gathered, it was built very well. And I'm not sure how tall the water gets, but it's not damaged the inside of the house. They had to take the carpet out, but that was it. And obviously I'm not sure about furniture, but the furniture that was in there when I looked at it didn't look like it had been damaged either.

    I don't know, I'm going to look into exactly how bad the flooding is, how it effects the house, and what can be done before I just say screw it. I'm not going to do it if it isn't worth it, but I'm not going to give up on it either until I know everything for sure.
     
  10. Corzhens

    CorzhensWell-Known Member

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    We had rented a house which is flooded 3 to 5 times during the rainy season. We stayed there
    for 5 years and we failed to control the floodwater. We even built a sort of water breaker in the doorway but that did not help. I would suggest that you look for another prospect since a house that can be flooded will be flooded and would ruin your liking for the house. It's better to buy a house that you would love 100%.
     
  11. kaileebee93

    kaileebee93New Member

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    I'm getting the house appraised today and a comp done on it. And talking to the owner about the flooding, since the neighbors had mentioned it and I don't know much more than what they said on that subject. Obviously nothing is set in stone, but I wanted to at least go ahead with these stages so I don't feel like I'm walking away from something good. That's just how I am, I guess. I'll let you guys know how it goes. :)
     
  12. Theo

    TheoWell-Known Member

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    I do think fixing up a house is always good, because you rarely find anything that suits you 100%. I do find when buying a property you should think about the resale value unless you intend to live there forever.

    It would be a good idea to look into the history of the house (you can do that online easily) as in how much it was sold for, and how many times it has been sold too. Has the owner listed it anywhere even as a private sale?
     
  13. kaileebee93

    kaileebee93New Member

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    Well, I had it looked at today by my grandad who is the President of the Realtor Association locally, so I know he knows what he's talking about. I could tell he didn't see what I saw, as far as what I wanted it turned into. But, it turns out, the flooding is not an issue!!! It's flooded once within the last 20 years, and it was barely anything! I guess when the neighbors told me, I misunderstood and took it as it floods anytime it rains a good amount. Which, isn't the case. Just the yard does when we have rain for 7+ days straight. The problems he pointed out, were already things I had addressed for myself. It's just a matter of the price. The price is wayyy wayy too high for the property. It appraised at $25,000-$30,000. And the owner got it for 25,000 & that was before the land was split in half between him and the current neighbors. He's owned it for the last 20 ish years. So, if I could get him down on the price, I would be completely comfortable buying it, I think. It's not built like houses nowadays, so I know exactly the style I could put into to make it our home if we go forward with it. I had a list of questions to ask and I got most of the answers, I felt a lot more educated and prepared this time, and I believe it made the owner realize that I'm not just some 20 something idiot jumping into something with no clue.

    And Theo, how would I go about finding the history of the house online? I'd like to at least know when it was built/how old it is, I've got a ton of information today when I talked to him so I'd like to add that to it. And as far as I know, I don't think he has listed it, and if he has it's been in newspapers every so often when he feels like it. We only found out about it because we are close with the people that live next door to the place and had mentioned it and it just so happened to be for sale.
     
  14. Theo

    TheoWell-Known Member

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    That sounds positive! The price is the issue as I doubt prices have doubled in the last 20 years as they have dropped, due to all the foreclosures. You can look on zillow and other sites, but as the land was divided it maybe harder. I would focus more on land prices for the area, how much per acre then and value it that way.

    What I would do as a bargaining tool (and have done) is take to cost of basic repairs, like a new bathroom or maybe to fix the drive, and deduct that from the price. That way you have a reason for the deduction and aren't just pulling figures out of thin air. I negotiated for the cost of a new bathroom and the owners agreed to the reduction the next day.
     
  15. explorerx7

    explorerx7Active Member

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    The land and layout would seem to be an attractive deal. However, that flooding issue would be a major concern for me. Have you evaluated the real works and cost to alleviate the flooding problem? It could seem simple fix but in the long run, it could work out to be a costly affair. I believe you should resolve the flooding issue before you accept this deal.
     
  16. Ke Gordon

    Ke GordonWell-Known Member

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    Yes, it sounds like you could get the property for much less. Your grandad is a good resource for you. I would ask him what you should offer for it. Offer and counter offer that is typically how it works in the real estate world. Either way if the owner doesn't accept it, I don't think this property would be that big of a loss anyway. Make sure to get it appraised and find out what all needs to be done.
     
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