Getting back to my post of a couple of days ago about the teacher looking to buy some Laurel real estate.
As I stated previously, my buyer found a home in the Mayfair subdivision of Laurel. The home had extensive damage and was being offered at an extremely low price.
My buyer and I roughly estimated it would probably not cost more than $50,000 to renovate the home and make it insurable by FHA loan standards.
If the home could be made insurable for $50,000 or less, then the total loan amount on an offer of $140,000 would be $190,000. This figure my buyer could afford.
An offer was made of $125,000 was made by the buyer. In addition, the purchase was still contingent on the value of the home after all estimates for work have been completed.
This is an important point. Once the bank and the seller agreed on a price and terms, the home needed to be inspected by a person who would know the cost to make the home insurable by FHA guidelines.
There is a person who is a licensed HUD inspector. The bank wants this person to inspect the home to see if it can be repaired within the terms of the contract. If the home can not be repair within the terms of the contract, the buyer and seller can re-negotiate, or the buyer can leave the contract.
Tomorrow, I will tell you what the licensed HUD inspector found and how much he thought it would cost.