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Beemer

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ARGH [Mar. 17th, 2010|10:35 pm]
Beemer
We're still not closed on the house. Hopefully we can still move in this weekend despite that. I am working on it.

The Mister Cranky-Pants icon is, for once, not even remotely exaggerating my mood. It is understating it.

So what's the deal? It's a number of things, but most of it hinges on the fact that we're buying a flipped property. "Flipped" meaning corporation-owned, and being resold for a profit above some threshold value.

(Aside: As best we can tell, the place was previously owned by a realtor, who, as many of them apparently do, owned many properties and rented them out, until the job and housing markets went south and she couldn't afford them anymore. House was foreclosed on, corporation bought and upgraded it, then put it back on the market for a profit -- though still at a good price. Flippage Has Occurred.)

We're getting an FHA loan, and it turns out there are rules about buying flipped properties when it comes to FHA financing. It used to be that you just couldn't do it at all unless it had been at least 90 days since the property was originally bought. As of February 1st, though, you can, if you get an anti-flipping waiver. This involves a bunch of stuff happening at "arms length" from the buyer and the seller. In particular, you have to get a second appraisal and a second inspection that are totally independent of anyone taking part in the transaction.

So the first thing that went wrong is that the lender (which is not my credit union, but a company that my credit union -- and many others -- contracts out to for FHA loans) was initially confused about the fact that this is a flipped property. They thought it was bank-owned, which is different. So they didn't realize they needed to get a second appraisal until late in the process, and that had to be ordered from the appraisals department (which is in Dallas) and go through a third-party company in Missouri that... well, I don't know that they necessarily dicked around and were lame-asses, but let's say that they failed to expedite it. So it didn't happen until just before we were supposed to close last week.

Which is actually the second closing date, because the first one was blown two weeks ago when they got back to us with the conditions from underwriting based on the first appraisal and I spent the day patching drywall. Which I guess is mostly because the first set of deadlines were unrealistically short, and that didn't get communicated. Fine, whatever.

Anyway, the second thing that went wrong, which is the cause of today's woes, is that we needed this second, independent inspection, which happened yesterday, and that identified some problems that will cause the FHA to refuse to sign off on the loan until they're fixed. And as I asked the office manager when I called her today to complain, if the second inspection is required for the anti-flipping waiver, shouldn't that and the second appraisal have been scheduled immediately once they realized that it was corporation-owned? As in, a week ago, so that last Friday, when we were saying "hey, will Wednesday work?" we would have known that these issues were there and needed to be dealt with before we could close?

So while the first case was probably just a bunch of knock-on bureaucratic delays due to some un-/miscommunicated information, this second case is, I think, due mostly to someone failing to Get Their Shit Together. (Also, how come this guy found a bunch of things that the inspector I paid didn't? Somebody is either too lax or too stringent; either way, it sucks.)

Anyway, we should be able to work this out. We really want to buy this place. Or rather, we NEED to buy it, because not only do we NEED A HOUSE TO PUT OUR STUFF IN so we can stop living amongst towers of boxes and being driven mad by it, we have given notice to the apartment complex, the cats are here illegally, and we'll be fighting off insolvency in the period between when we close and when I get my tax return. So if we have to start house-hunting all over again, we'll be pretty much hosed on a number of fronts.

But the sellers also have a lot of incentive to help us work it out, because every day they hold on to this property is lost future profit in buying and selling the next one. So, that's good.

Currently, we're really, really hoping they'll agree to let us move in this weekend and rent the place for a week or two while we get it all sorted out. We'll work with them to get the necessary fixes done, and if there are big-ticket items (like, new furnace may be required), the sellers will pay for them and add it on to the purchase price. (We can easily pay $8 more a month over the lifetime of the mortgage, but we can't fork over an extra $4k all at once up-front.)

So argh. Very argh. A whole pile of argh. But if all goes as I hope, we can move in this weekend just like we were planning to, and then it'll just be a matter of getting some licensed contractors in to inspect a couple things and possibly (hopefully not) fix them before we finish off the paperwork to actually own the place.
LinkReply

Comments:
[User Picture]From: derbiser
2010-03-18 04:48 am (UTC)
((hugs)). If there is anything we can do to help, let us know.

Prayer wheels spinning, and all that...
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[User Picture]From: dr_tectonic
2010-03-18 05:11 am (UTC)
Thank you. I'm really hoping the answer will be "help us move this weekend!"...
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[User Picture]From: emramesha
2010-03-18 05:02 am (UTC)
I hope it all ends well for you - may the epic finally come to good close!
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[User Picture]From: dr_tectonic
2010-03-18 05:12 am (UTC)
Thank you. Someday this will be a good story, I'm sure. Right now, it's just a GIGANTIC PAIN IN THE BUTT! *scowlyface*
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[User Picture]From: flwyd
2010-03-18 06:10 am (UTC)
On the plus side, if it drags on too much longer, it will have been 90 days and flippancy won't matter.
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[User Picture]From: melted_snowball
2010-03-18 09:19 am (UTC)
I feel like the only right thing to do is to link to the "Telephone" video right now, since I know that amuses you, and perhaps you have not watched it your proper quota of times yet today.

http://www.youtube.com/watch?v=GQ95z6ywcBY&feature=player_embedded


On a more serious note. When we moved here, quite some time ago, our inspector sucked, and didn't find things that cost us thousands of dollars that we weren't planning for. I really wish we'd had that news. (Also, look at your contract. You may have some leverage with the seller because of the big-ticket-ness of the items. That is, you may be able to make them be on the hook for it.)

I wish you an enormous acre of peace. And some pie.
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[User Picture]From: dpolicar
2010-03-18 11:43 am (UTC)
That sucks.
You deserve better.
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[User Picture]From: pekmez
2010-03-18 12:27 pm (UTC)
*hugs* I hope this saga ends with you in that house, soon.
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[User Picture]From: jennsteele
2010-03-18 12:57 pm (UTC)
*hugs*

So sorry this is so painful.
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[User Picture]From: bats22
2010-03-18 01:00 pm (UTC)
Lots of argh, agreed. My wishes for a speedy and good conclusion to all this painfulness.
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[User Picture]From: kev_bot
2010-03-18 01:33 pm (UTC)
I'm so sorry, my friend. Keep us updated on things working out. And they WILL work out.
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From: ajfbs
2010-03-18 03:13 pm (UTC)
ACK!

I'm hoping that because the seller wants to sell to you and you want to buy it, the rest can be hammered in to place.

Someday this will be a story you can tell to people at a lovely housewarming party in your new place (where y'all live with a very low cardboard/possessions ratio).
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[User Picture]From: zalena
2010-03-18 04:00 pm (UTC)
I would be very wary of moving into the property as a renter rather than a buyer. This sounds extremely messy and robs you of the ability to walk away from the property. Is there reason to believe the house won't pass the second inspection? You've already gone to extra lengths to get it to pass the first in the interests of time: work, that technically, the owner is supposed to arrange.

I would be calling them every single day and pestering them about what is being done. (Of course you may be doing this already.) Taking names, taking numbers, and making threats. Get whoever wants you to buy this house to do the same. Because right now, it sounds like they don't want a buyer, but would be happy to take a renter.

But you know me and legal issues. I'm overly cautious.
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[User Picture]From: detailbear
2010-03-18 05:25 pm (UTC)
I'm also kind of wondering if the house needs to be free and clear of any encumbrances, like renters, even if that's you. I hope you've checked with bunches of people about that since some of these people don't seem so bright.
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[User Picture]From: goobermunch
2010-03-18 07:45 pm (UTC)
Actually, if you're the renter and you purchase the property, your leasehold interest and your fee estate merge, and you simply become the fee owner.

--G
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[User Picture]From: dr_tectonic
2010-03-18 09:26 pm (UTC)
We actually asked them if we could rent until closing (suggested as a possibility by a colleague of our realtor's) and they've been very cautious about it. (I actually just got off the phone with their realtor.) They don't want to be landlords, they want to close the deal so they can take the proceeds and reinvest them.

It does reduce our ability to walk away, true, but that's pretty minimal already; we're at a point now where if we can't close on this place, we're basically hosed in several different dimensions simultaneously.

I think what's really going on here is not that the seller is trying to hide a bunch of flaws, but that the second inspector didn't actually evaluate anything, he just looked for boxes to tick on his little list. "This is more than 20 years old, have to have it checked by a licensed contractor. This is rusty, have it checked." Whereas the first guy, the inspector we paid for, said stuff like "Yeah, this is old, and you'll have to replace it eventually, but you should get another 3-4 years out of it. This is a little rusty, but in my experience not a problem." So now we just have to get several different guys to come in and say that officially...

But I do appreciate your caution. It's good to have additional perspectives!
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[User Picture]From: zalena
2010-03-18 11:23 pm (UTC)
In other news... Sherlock Holmes will be at the dollar theatre starting tomorrow (3/19.)
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[User Picture]From: rg_rothko
2010-03-18 11:31 pm (UTC)
I so want to go to that.
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[User Picture]From: dr_tectonic
2010-03-18 11:43 pm (UTC)
Woot! We shall schedule an outing!
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[User Picture]From: da_lj
2010-03-18 04:47 pm (UTC)
Rgh.

Hoping for a least-painful resolution.
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[User Picture]From: annlarimer
2010-03-18 07:51 pm (UTC)
You will succeed.



And if not, you can at least have the satisfaction of invoicing the hell out of someone for the drywall work.
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