Chicago Ridge Foreclosure Fiasco Finally Closed!

Posted by Judy Orr on Friday, April 10th, 2015 at 2:00pm.

It took a patient buyer to wait for the sale of a Chicago Ridge foreclosure home to finally close. Here is her testimonial:

Had a great experience with Judy Orr and James Herter. They are very informative, people who have done their homework, gives excellent advice. Also, very easy to communicate with, promptly returns phone calls. Would definitely go with Judy and James again, and recommend them for everybody.

She was a first-time buyer and most of the homes in her price range with the amenities she needed were foreclosures.  And believe me, she wasn't picky.  She wrote up offers on a couple different Chicago Ridge foreclosures and we even had another one under contract.  That one had the gas meter removed and it would have taken up to 12 weeks to get one installed!  I couldn't believe the gas company wouldn't want another paying customer, but that was what we were told.  And as happens with more and more foreclosures, the buyer was responsible for fees associated with turning utilities on for the home inspection and the appraisal (2 different time frames).

This was conventional financing, but the appraisal sounded like an FHA appraiser did it

Chicago Ridge foreclosure maze

This is the 2nd time I've seen a conventional appraiser require repairs.  We were worried about some of it (huge holes in the wall down to the studs), but some of the items that came back were cosmetic (refinishing the hardwood floors, putting missing drawers in, fixing an area of the hardwood floor in the kitchen, filling in all holes in all walls and painting, disabling the electric service in the garage & fixing up the bathroom.

I expected the holes in the walls to be repaired, but we at a standstill near closing time because the appraiser mentioned that the place needed to be painted inside. We had the loan officer argue that the walls were patched and the buyer would paint the home herself.  That was finally agreed on.

What took so long?

When a buyer applies for a mortgage a couple things have a time frame.  One is locking in the interest rate and the other is that the credit check and all finances, employment, etc. expire and would need to be redone - pretty much starting from scratch.  So the buyer was under the gun to get this closed so she wouldn't have to start over with her mortgage application - which would have cost her moretime frame for Chicago Ridge home for sale money.  

The listing agent had to organize bids for the work required by buyer's lender based on the appraisal.  As you can imagine, just getting different bids can be a process, and this was a vacant property.  Most foreclosure listings will not fix anything - they are all "As-is" sales.  But we explained to the listing agent, who explained to the lien holder, that if they didn't do these repairs they were going to be limited to a cash buyer or someone using a rehab loan - which could take a very long time to find.  So they agreed to make the repairs so it could go through conventional financing.

Then, the amount of the repairs were higher than what the lien holder was willing to spend.  So we went through negotiations and my buyer added the repair amount to the contract.  It was work she would have had to do anyway, so she paid to have it done.

How did it look?

We didn't see the home after the repairs were made until our final walk-through.  The wood floors were beautiful - but why was a cosmetic item like this required for conventional financing?  Same thing with kitchen drawers.  They matched them up pretty good but again, we felt it was cosmetic. The wood floor patch in the kitchen was done very well, and I'm glad that was required.

The walls were also done very well and all of this was one less thing the buyer had to do before moving in, but maybe she could have had it done for less.  The best thing was the bathroom.  The tile around the faucet was bad - water damage, soft drywall under that was covered in plastic.  I was only expecting that wall to be re-tiled.  The new bathroom was completely redone and was beautiful, but what if my client had preferred different tile or other items that were changed.  She paid for it, after all!  It was nice and neutral but what if her taste was different?  

The appraiser missed the broken hot water heater

We knew it didn't work early on.  We let the listing agent know, who told us it would be fixed.  It wasn't, and maybe because they were working on these appraisal required repairs it got lost in the shuffle, although I just don't think they wanted to fix it.

My client still wanted the house and was willing to get a new water heater.  But that just goes to show how crazy this appraisal was.  Again, we're talking conventional financing, not FHA or VA.  Mostly cosmetic items were required but the appraiser didn't care if they could take a hot shower or bath.  

My buyer knew she didn't have a lot to choose from in her price range so she accepted everything as it occurred.  I hope she enjoys her new house and creates many happy memories there.

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