I found a great house up for auction - it’s a rancher with 3 bedrooms, 1.5 bathrooms, living room, kitchen, dining room, family room, full basement, front and back porch, central air, great school district, and even closer to my in-laws than we are now (yes, this is a selling point for us).
I had a friend who works as a title searcher do a little digging for us and here is what we found. The house was owned by a married couple. The father shot himself :eek: in April in the house:eek::eek: so they now understandable want to unload it (pun fully intended). The only mortgage they took out on the property was fully paid off a while back. All taxes have been paid off and no judgments have been taken out against the owners or the house. Basically the title is free and clear.
This could be a great opportunity to get out of our current home - a double-wide trailer. The trailer is in great shape and we love the floor plan but we both desperately want an actual house. A big reason for this is the lot rent. We own the trailer itself (or will once the loan is paid off) but not the land. We pay around $400 a month in lot rent. This gets us some snow plowing in the winter and maintenance of the common areas like the mailboxes and a plot of grass some of the kids play in. Other than that it’s basically money down the drain. When we were first looking to buy a house 3 years ago we were in the tail end of the housing boom and most of the houses in our area were way out of our price range, in really bad shape, or had layouts that we really didn’t like.
One possibly big wrinkle in our plans is if we do decide to purchase this home my in-laws will have to co-sign and also help us with the down-payment. My MIL actually found this property and came to us with this proposal. My husband was laid off from his teaching job a while back. Between his regular subbing jobs and some help from unemployment we have been able to comfortably pay all of our bills and even put a bit aside in savings, but I doubt a mortgage company will even consider us on our own.
My husband and I are going to check out the property today, a full week before the official open house.
If we are still interested in buying the house we will definitely get all of the typical inspections.
What should we be looking out for, asking, etc.? It’s been a while since we went househunting last (3 years to be exact) and we never considered auction properties before.
*Wow, that was a lot longer than I had intended. *
Only advice I can offer is to talk with your banker as soon as you can. Explain your situation and your relative’s help with down payment. Find out how much money you can get and what your monthly mortgage payments would be. Because your in-law’s money is involved in the transaction, you need to be absolutely, double-dog, certain you can handle the payments. Also find out what the auction rules are. Most property auctions require the buyer to settle up quite soon, days or even hours after the auction ends. Getting pre-approval from your lender is essential in these cases.
Thanks,** Alpha Twit**. This is our number one concern about the sale, especially since someone else’s money is also on the line. We are going to see a lender this week. We won’t even consider buying without having all of the finances in order. We would need to have 10% down on the day of the auction and closing needs to be within 30 days of the sale. My in-laws are going to float us the down payment until we figure out how much we will get back from selling our place. If need be they could also lend us the difference.
You need to run a budget that includes you guys paying the highest projected amount for the mortgage, plus the lot rent and trailer note. Those payments won’t disappear once you buy the house - you will still have to sell the trailer, and I know from my sister’s experience that used trailers are worth very little.
If you can’t make the numbers work, with a $100 or so left over after paying all of the above plus your estimated utility bills, water, maintenance, etc., then you can’t buy the house.
Sorry, but I hope that you are being responsible about this. We don’t need any more homeowners behind on their payments in this economy.
Do you have a potential buyer for your current place? How long could you handle a mortgage and the lot rental on your trailer? Instead of selling the trailer, have you considered running it as a rental property?
I just talked things over with my husband. We have decided to wait it out until we are in a better situation financially. Our trailer isn’t ideal but it’s good enough for now. We need to work on paying off some of our debt and building up our savings first before we try to buy a house. The more I think about it the less I am comfortable with relying on anyone else but us to buy a house, especially since so much would be on the line.