House #7 – Rochester Part 1

by brandt

Well, we’re back on tour again, and like a 14-year old at a Justin Bieber concert, I squealed and screamed and soiled myself just a little bit at this beauty of a house.

BUT FIRST!

You might be wondering what the deal is with House #2 – Rochester and House #6 – Lake Orion.  Well, after our house tour last night, I broached the subject with our agent.  I’m sure she was probably sick of me always wanting to know what the status was, what else did we need to do to get them to sign the purchase agreement, and what they mentally were not understanding about our offer.  Well, we finally got some answers, and it was like a lightbulb clicked on in my head.

As we were discussing how to draw up the PA for this house, I asked my agent “So, do you think it would be worth it to get in touch with those other 2 houses and let them know we’re moving on, to see if that would light a fire and get them going?”  She looked at me, serious as can be, and said “I’m through with them.  We’re moving on from those houses.”

I was a bit taken back, because that’s some strong language from her.  I asked her what she meant.

“They strung you along, Brandt.  I should have seen it from the start.”

SCANDAL!?!?!?!?!?!?!?

Here’s what happened – Remember  House # 6 – Lake Orion?  They didn’t want to pay the closing costs on their house.  That was the sticking point.  But from emails back and forth between my agent and the sellers agent, we found out a lot more about their situation.  And the pieces match up perfectly with House #2- Rochester as well.

See, for a short sale, part of the selling point to the bank is showing “hardship.”  And it’s not just “my life is hard” hardship.  It’s got to be a hardship that the bank accepts, and usually that’s a financial hardship.  See, the bank doesn’t care if your marriage isn’t very good, or if your job is hard, or if you are just barely making your bills, or if your house isn’t valued at what it should be, if your kids are hooked on drugs, or if you’re an alcoholic or a chronic gambler.  Sorry.  They really don’t.  They care about their bottom line.  Here’s what Mariwyn Evans from Realtor.org said:

In addition, the sellers should submit a “hardship letter,” explaining the circumstances that make it impossible for them to pay the full amount of the loan. The seller needs to be able to show true financial hardship. Someone with the assets or the income to pay is unlikely to be considered, say most interviewees…Genuine hardship, such as a lost job or high medical bills from an illness may also have an influence.

Basically, the bank looks at the house and says “OK, you’re not in a position to pay us, so we’ll take a little bit of a loss on the house in order to get another person in line to give us money rather than have a risky dead asset not earning any money in an empty vacant house.”

So what happened?  The people in House #6 – Lake Orion moved to Florida and quit paying their mortgage.  Remember when I wrote the original write-up for that house that it had gone to short sale once before and been rejected?  Well, the owners decided to quit paying their mortgage payments to hopefully change the bank’s mind.  Or so we thought.  After emails and piecing together pieces of different stories, we found the real scoop.

Yes, they moved to Florida – but…he took a better paying job.  They looked at the housing market, realized that they bought their house for much more than the market was worth, and said “There’s no way we can sell our house for that much – we’ll lose money!  Let’s do a short sale and then we can break even.”  And remember House #2 – Rochester?  Same situation – no wonder the agent was so insistent that we offer what he wanted – because he knew the bank wouldn’t accept as low an offer like ours, because the people really didn’t have a hardship.  As a matter of fact, my agent thinks that both parties put their houses up for 2 reasons: They were ignorant as to the short sale market (which I am now EXTREMELY grateful we have an agent who specialized in it) and second, the agent put the short sale up to drum up business for himself.

All that said, we found another house on the market yesterday.  It’s a weird time in the mortgage industry right now in Michigan, with inventories going way down, and while there are lots of houses still out there, there’s a reason those houses haven’t sold yet.  I found this one yesterday scouring through the MLS listings, and it had just been reduced.  It’s quite far out of our price range, but our agent thinks that it really doesn’t hurt to see if we can get it at a price within our range.

Details:

  • Built in 2000
  • 3 BR
  • 2 BA
  • Unfinished Basement
  • Tudor style home
  • 2,333 Sq Ft
  • Wonderful school district
  • Government Homepath Funding
  • Listing Price – $174,900

Here’s some of the best parts about the house, though.  We would only be the 3rd owner, which is a lot for a 10 year old house, but…look at the sale prices:

  • 2000 (first owner) – $281,000
  • 2005 (second owner) – $295,000
  • 2010 (Homepath Foreclosure) – $174,900

Wow, right?

So I emailed my agent and asked her if she felt it would be worth a shot.  According to her words, “it’s worth a stab” (she might need to lay off the Dexter!).  Ashley met me outside our apartment, we plugged the address into my phone, and off we went.

We drove.  And drove.  And drove.  I think my GPS led me the longest way possible, but we finally reached the house at dark and didn’t really get a feeling as to what we could expect.  It was just at the border of the boundaries of where we were looking, and while I’m still a bit hesitant, the price might sway me more towards loving it.  The other issue was it wasn’t really in a subdivision.  It was off a dirt road (only about 100 yards of dirt until you hit pavement), and the houses were…weird.  There were houses that were brand new, and really nice.  There were some dumpy houses from the 1930’s.  There were middle of the road houses from the 70’s.  But it’s an odd smorgasbord of houses (and probably incomes) within the area.

OK, this has gone on long enough for one post.  Part 2 of the House Tour (WITH PICTURES!) is continued here.

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3 Responses to “House #7 – Rochester Part 1”

  1. That picture is hilarious! My friend is 26 years old and LOVES Bieber. It makes me gag. haha! 🙂

    • I was talking to a friend’s 14-year old kid about his haircut, and told him he was starting to look like Bieber. He looked at me, and with a goofy lisp said “Yeah, me and Biebs, we planned this out.”

      I’m still trying to convince my wife that Bieber is what’s wrong with America. She’ll have none of it.

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