Question on a foreclosure?
Question:
The outside area is in total disarray though. The yard needs major work, new fence, and landscaping. It also has a pool that they never covered last winter, so yeah lots of work.
The inside has real hardwood floors and a beautiful kitchen. So the inside seems to be in good shape.
The home just needs some TLC. It really is a nice home- just needs someone to take care of it. Since the house has some equity, when could we take out an equity loan for improvements? What's a good price to offer and would we have a good chance to get it since the outside would turn off most buyers? And yes we can afford it..We look forward to a project! Just seeking opinions and planning ahead and needing a strategy. Thanks!
Answer:
Before you purchase, still have a home inspection. It can look good and still have significant heating and plumbing problems. Appraised value is a nice starting point, however, I've seen many homes appraise high but not re-sell at that amount because of suddenly low sales in the area or too many on the market for sale at the same time.
First, if the house has been on the market for a month at $122K and hasn't sold, it is unlikely that it is really worth $145K. If that was true why wouldn't someone have bought it by now. Appraisals are someone's judgment and can be wrong. Most lenders will treat the lower of cost or market as the house's value for lending purposes. So, the only equity in the house will be the amount you put down in cash.
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