Effort to buy a distressed house distressing, educational
Sunday, July 8, 2012
For nearly two months, Fannie Mae either countered or rejected my offers to buy a foreclosed house in the Shumway neighborhood near downtown Vancouver. In early spring, the bank finally accepted one of my offers.
My triumph quickly turned into dismay on inspection day.
I walked into the house to see my real estate agent in a panic, water gushing from the ceiling and the odor of gas. By then, a technician from Northwest Natural Gas had been summoned to shut off the gas leaking from a rusted furnace, and the inspector was scrambling with one inadequate towel to mop up water that had leaked from the upstairs plumbing.
The scene of chaos was my first indication that after months of dogged determination to buy the charming 1930s Tudor-style home, the house needed more repairs than I could afford. I had to walk away from the deal.
The inspection found the plumbing problem, widespread water damage in the hallway and living room, crumbling chimney mortar, a rusted and leaking furnace and a variety of other small items. A subsequent sewer scope revealed that the house's sewer line needed to be replaced. A new sewer line was estimated to cost $7,000 to $10,000.
My experience with a bank-owned property illustrated just a fraction of the possible complications involved in buying a distressed property. I learned, for instance, that some lenders will compete for the business of a buyer with a high credit score by offering lower interest rates even though my mortgage broker had told me that interest rates would be same among all lenders.
Banks are not always motivated to sell, even when there's just one buyer making offers.
A sewer scope is as important as a home inspection for an older home and is worth the $400.
The article above is my attempt to help others as they navigate the foreclosure and short-sale housing market.