This year was a very special mother’s day for my wife, Angela.
Angela was adopted.
Angela said that her entire life she felt like there was something missing and she always wanted to find her birth mother, even though she has a cousin who is also adopted who has a relationship with her birth mother, that isn't very good.
A couple of times when she was younger, she went to psychics who both told her that she was very close to her birth mother. She was living in Queens.
In 2003, Angela was diagnosed with advanced lung cancer, and she became even more determined to find her Mom.
She registered on several black market adoption sites, and continually updated them through the years. Every time there was a new person who found adoptees on one of the talk shows, Angela would go to their web site and register.
Now somewhere along the line, Angela had gotten a copy of one of the adoption proceedings, which had the birth mother’s last name. We tried to find a Brooklyn phone book from 1960, but were unsuccessful.
Angela’s birth mother’s name was a somewhat common Italian name, and there are a couple of politicians including an assemblyman who had the same name. We reached out to a couple of local politicians to make the call, but no one wanted to get involved.
At some point, under the guise of trying to find medical history, I went to the Surrogate and asked him to call his counterpart in Brooklyn, where the adoption took place 40 some odd years ago, but of course he said no.
Well, Angela went through her chemo therapy, radiation therapy, surgery, more chemo, over the next couple of years, without finding her birth mother, but continued to update her information at all of the adoption sites…nothing ever happened.
Out of nowhere, Angela received an email from her birthmother’s sister whose other sister had Googled Angela’s birth mothers name, and came across one of Angela’s postings.
Very soon after the email, we met at a restaurant at Grand Central Station- (Angela, me, two aunts and her newly found younger brother).
At it happened, Angela’s birth mother had died several years ago- of lung cancer (isn’t that spooky?).
For most of her life, they lived 9 blocks away from each other.
They kept the same telephone number until 2006.
No relation to the Assemblyman, or the other two well known politicians.
Anyway, Angela’s life has now become fuller, more complete, and she is a much happier person. She has a brother that she kids around with, like you only can with a sibling, and a whole new family that she has become extremely close with including nieces, nephews, and aunts.
Speaking of Google, if you haven’t yet, you should “Google” your own name & significant others, names, long lost friends, enemies, etc. I ran my father’s name recently and found a photograph of him and his Air Corp. crew from World War II in front of their airplane, a photograph that I had never seen, nor knew that it even existed. (In World War II, the air corp was part of the army, later it became a separate branch of the armed services).
So this mother’s day I wanted to make it special for her.
I drove to Queens, and picked up my mother in law, Angela’s adoptive mother, to spend the weekend.
I cooked (on the grill), and I mowed the lawn.
Now I hadn’t mowed a lawn in perhaps 40 years. I’ve had landscapers all these years. And when I was a kid and mowed the lawn at my parents house, the lawn was 15 feet wide by 15 feet deep if it was that.
But this house has a lot 185 x 185 totally surrounded by grass, except for the driveway, and the house footprint itself. Do the math.
So I borrowed my next door neighbors mower (he does it every weekend, religiously, unless his kids are home from college, and then they do it), but his lawn looks like Yankee Stadium. When I started going straight across, my wife stopped me and pointed me in the right direction (diagonal).
It took me most of the day. Of course I stopped, drank several bottles of water, ate a Myoplex protein-energy bar, but mowed the entire property, all ¾ of an acre, not exactly straight lines, but definitely diagonally. (I can't walk in a straight line on a good day, because of my Meniers disease that I have spoken of, is also a balance disorder- vertigo and all that- you should see me try to do step aerobics).
Although I am a “tad” on the pleasantly plump side, I happen to be in great shape (round is a shape!)- I work out fairly regularly, I go on the cross trainer for 45-60 minutes at a time, several times a week, currently at level 11. I lift weights, do pushups and sit ups. But man, did I ache the next day. In fact when I woke up in the morning, I was totally disoriented, and it took me a couple days to get it back together.
But I did such a great job, my wife decided that we would skip the landscaper this summer and I would do it.
Lucky me.
So a few weeks later we had a day with no rain and I was volunteered into "mowing the lawn" again.
Remember we had record rain fall this year in June. It seems to me that this is the first week and weekend we've had that have felt like summer.
My neighbor was going out for the day so he gave me the mower & gas can and said "Have a Nice Day." Now this lawn mower was pretty old. The lever that you have to pull/turn/click into in order to make the wheels turn had broken off, so you had to have fingers of steel and be strong as an ox to make it catch. Next the bag that collected the mowed lawn was way dented beyond recognition. It still caught most of the grass, but it also makes a trail on the sides of the run, which on the one hand is nice, because it gives definition to the diagonals, but on the other hand makes for a sloppy job.
But, having run out of excuses, I started to mow the lawn again. Only problem this time, was that the lawn mower was smoking, and kept stalling out. I couldn't tell if was stalling because the bag was full of grass (don't forget it had been raining a lot, and it hadn't been mowed in a while, so it could very well have filled up the bag quickly); or if it was some sort of a mechanical issue (which is not my expertise).
So here I am, mowing, and emptying the bag into a paper "recycle mowed lawn bag."
I was able to complete the front and sides of the houses, and was about 1/3rd into the rear when it just pooped out on me, and I was pretty pooped out myself, so I put it in his garage, and took a shower. Actually I used up all his oil, went out and bought a quart and I used half of that, which was probably the reason it was running so hot and smoking. A little while later, his son came home and was mowing his lawn, and he said it was running great - told me I should finish mine, but I begged off for the day. (I probably fixed it so that it worked for him).
Which brings us to FATHERS DAY. Remember fathers' day? That’s the day where fathers get to sleep late, go fishing or go play golf, or do whatever they like to do.
Not moi. I got up on father's day and we got in the car and went to Sears to look at, you guessed it, LAWN MOWERS.
My wish came true, I was getting a brand new lawn mower for father's day. Yippee I Oh kayyea.
Oy Vey.
So off to Sears. Because of the rough terrain of our property we opted for larger wheels in the back than the front. Has to do with turning and working around tree roots, etc. We also wanted one with wheels that turned by themselves (self propelled), and must have a bag to collect the mowed lawn.
Now you can buy a lawn mower for thousands of dollars. Maybe you can. I can't.
We picked one out that they were "pushing" (i.e. on sale), the guy checked the store computer, and sure enough they had one in stock, we picked up a gasoline can (state of the art plastic gasoline can, really cool), and an extra quart of oil. Paid for it, drove around the back to pick it up.
Guess what- they didn't have it in stock. They have one in inventory, but they don't have one in the back of the store where you pick it up. They tried to explain it to me, but it was beyond my comprehension.
Now next to the cash register, where we paid there was a sign that stated Sears policy- If we do not have an advertised item in stock, we will give you a better one for the same price.
Didn't happen. I tried. I said- hey the sign says- but no matter what, they didn't want to hear it, no good, the manager will never go for it (I demanded that they go find the manager, but he was nowhere to be found, it was father's day, he was probably sleeping late or playing golf or gone fishing).
So back to the display, and there was the other just about the same grade lawn mower, self propelled, with a bag, in stock, in the box.
So back to the back of the store, and sure enough, in a box, but mostly assembled (just have to do a couple of little things).
Stopped at the gas station and filled up my new really cool plastic gasoline can (It's not really a can, its plastic, so what is it called?),
Put it all together, added the oil and gasoline, pulled the guaranteed to start every time cord and , vroom vroom, ready to mow the lawn.
So I make the first run, "diagonally" as far as I could go, turned it around, and this brand new, spiffy, bright red lawn mower just isn't working properly. I look at the wheels, and they won't remain level, so I try to adjust the back wheels so that they were on the same page. I can't get the lawn mower level on the driveway. So I take off my glasses so I can see up close (those of you over 50 will know what that meant), and I examine the wheels to see what is wrong.
Sure enough, I notice that the thingamajig that you adjust the wheel with on one of the sides is not stationary. I search some more and I discovered that there is a piece of metal sticking out of the gizmo that is supposed to be fitted into a hole in the thing to secure it in place. But on one side, it isn't there- it's been bent under the hole, instead of sticking straight out through the hole (whoever put it together in China or wherever it was built, cheated), but the point is, it didn't work.
So back in the car, back to Sears.
I can't find the guy who sold me the first two, and the person there is asking me if I drained the oil and gasoline.
Those of you who knew my father, probably remember him as an extremely loud person. He was known to be an extremely loud person. Many people liked him because he was so loud, many people didn't like him because he was so loud.
I am much louder.
#w&#%!!!! Expletive!!!! --deleted--
So while they were looking for my salesman, I went around the back for the third time today.
When I got there, they helped me take it out of the jeep, and took it back, and gave me a piece of paper to bring to the salespeople.
They mentioned that I was supposed to remove the fluids, but that it was "okay", they'd handle it.
(Damn right)
Back to the front, I found a nice lounge chair display to wait for my salesman. When he woke me up, very gently, he told me to stay there while he did the paperwork, and brought me back my money.
Home Depot, there I went
………………….to be continued
Friday, July 24, 2009
Thursday, July 2, 2009
So how do you buy a foreclosure anyway?
While foreclosures are plentiful, making up a huge chunk of the real estate market, the way that you buy them is not a whole lot different than the way that you purchase any other property.
Seeing the Inside of a Foreclosure
First of all, seeing foreclosures is easier than any other house. They are always vacant, generally they have been cleaned out of debris (although not always), and they usually have a lock box These lock boxes have combinations of either numbers or letters, which when set properly will release a key
There are three condo's in a building on the North shore that I have been trying to show for some time to my customer. And we just can't coordinate it. Friday we showed up, and the homeowner wasn't there. One homeowner says only after 4, and one says only before 2, and the third says wait until next Monday. Oy vey.
Foreclosures are Sold “As Is”
When you buy a foreclosure, the banks make no representations, other than good and clean title,. They don’t represent the roof is free from leaks, nor that the plumbing, heating, and electrical systems are working.
Sometimes, you can’t check things because the water has been shut off, and there is no electric on. But you can still see roof and basement leaks, and other structural items. They will allow you to bring in an engineer to make an inspection/evaluation, even after they have accepted your offer. A decent engineer can pretty much tell you the condition of everything, even without electric, gas or water. You know that the bank gave a mortgage to someone and at that time, these things worked. There aren’t that many moving parts in a furnace. You can still follow the path of damage to a unit. You know when the pipes broke, what the damage was. Leaks leave stains and odors.
Speaking of engineers and home inspections, Bill Coull, who was the first person on Staten Island to specifically do home inspections and reports died this week of cancer. I have to wonder how many people bought houses on Staten Island only after Bill said they were okay first. I knew Bill for 30 years, and I never heard a single negative thing ever said about him, or by him. He was a good guy, a good engineer/home inspector, and will surely be missed.
Making an Offer
In order to make an offer, you have to submit, in writing with proof, how you will pay for the property if your offer is accepted. If it is an offer of all cash, you must show proof that you have the cash (bank statements). If you plan on putting down a certain percentage, and getting a mortgage for the balance, then you must substantiate the cash part, and submit a “pre qual”, a letter from a lending institution that states that you have been “pre-qualified” for a loan in the amount of at least what you have put into your offer.
Now some banks/asset managers require that the Pre Qual be case specific- that it specifically mentions the property that you are making the offer on. Not a problem, as most mortgage brokers/bankers want your business and would gladly accommodate you with as many letters as you want. It’s easy since its all word processing anyway.
Some selling banks require that you get the “Pre Qual:” from them, regardless of whether you have a pre qual or not from another lender, they want you to go through them. (They want this to make sure that they aren’t wasting their time - or - to try to sell you a loan?)
Still other banks will make the financing attractive to purchasers of their inventory. Lenders like Wells Fargo, Countywide, Chase, etc. They have bitten the bullet, and decided to make the best of their situation by turning the non-performing loan into a new performing loan. These banks are in the loan business.
Finally, there are situations where there have been undocumented alterations which may render the property un-mortgageable in the conventional market. Often times in these cases the bank will offer the financing.
I had a customer who wanted a certain house, but there was an alteration that needed to be filed, so he couldn't get the 3% down below market first time homebuyer FHA deal he wanted, so he didn't buy the property, even though Wells Fargo agreed to loan 90%.
As you know from my prior emails, no one is quite sure who owns many of the loans that are merely “toxic assets”, Mortgage Based Securities’, that were the cause of the crash of the subprime mortgage industry, and the fall of wall street, etc. These mortgages were bundled in packages and sold to investors, and have ownership like Deutche Bank as trustee of series of bonds #200-212, of 2007, etc.). In these cases, there is no bank to offer financing, and the servicing company is not in the business of making new loans.
(If you are new to Lasher’s List, or just want to re-read some of my past articles including the explanation of the crash, why there are so many foreclosures on Staten Island, the role of organized crime, and all the rest., they are all posted at my blog, at http://lasherslist.blogspot.com/)
When you make an offer to buy a foreclosure, the bank generally responds in one of three ways:
1. If your offer is full asking price, all cash, and close in 30 days, they might say yes.
2. If your offer is for less, and your terms are reasonable and your financing checks out, they probably will counter at “give us your highest and best offer”
3. If your offer is too low, and the servicing agent is not having a good day, then they will not respond at all.
Even if your offer was not responded to, they do not take it personally, you can then make a new higher offer, and again one of the three above will occur.
Some banks respond quicker than others.
Sometimes a property hits the market that is in a desirable location, and lots of people see it and make offers. Sometimes the bank will tell everyone to come back with their highest and best offer, and take the best deal in their eyes.
We don't really know how they see the offers in their eyes - You would think that a stronger buyer all cash would beat out a 3% down deal for more money, but it doesn't. Sometimes higher price wins, sometimes all cash quick closing gets it. Probably depends upon the history of the particular property, how many times they've sold it, but the buyer wasn't able to get financing after a long drawn out process.
Those of you that receive all of my emails receive these BOM's which I identify as outstanding opportunities. If you do not receive all of my emails and would like to, just send me an email and I will move you to the appropriate list. (Some people only get occasional listings, but all of my news type emails and my pontifications).
Your offer is accepted/Contract signing
Now that your offer has been accepted, a contract is sent out to your lawyer, or some banks require the customer to sign an 8-18 page agreement that you are not able to make any changes to. Sign it, or you don’t get the house. It doesn’t matter whether it’s the addendum/agreement or the regular contract of sale by and between the lawyers. Sign it without making any changes, or you don’t get the house. This is just the way that it is.
One of my clients who is a well known substantial builder on Staten Island asked that the contract of sale be put into his building corporation, instead of his personal name. the bank said no, and put the property back on the market, while we prepared a new offer, for the same amount, same terms, in the name of the building corporation, and had to get a separate letter from the bank showing the funds in the name of the building corporation.
Some of the lawyers for the lenders are requiring certified funds or bank checks for the down payments. It used to be that the contract down payment clause said “subject to collection”
I think that it has to do with the fact that the bank is taking a hit, and it's a kind of like their way of getting some sort of Montezuma's revenge.
No biggie, small price to pay for the bargain that you are getting.
Financing a Foreclosure
Financing a foreclosure is no different from financing any other property.
If the buyer is going to occupy the house themselves as their primary residence, then all of the mortgages available for any other buyer is available for the foreclosure, depending upon the condition of the house. In order to get a 96.5% FHA or SONYMA, the house has to be in good shape, with everything working. But regardless of the percentage down, the house is going to have to appraise, and you still only can borrow the percentage in the particular mortgage you apply for (The loan to value of the property).
If the house is a wreck, then foreclosure or resale, the same financing is available generally. The difference is the conditions to obtain financing that the seller allows you. But if the house is a fixer upper with things not working, so that the house doesn’t qualify for FANYMA etc., then you have to go to a commercial lender to get the financing, although there are mortgage programs out there for fixer uppers- but generally calling for you to get architectural plans permits and approvals first.
My associate Don Adler and I just sold the Landmarked 1869 Bedell house in Tottenville to a young lawyer on Lasher’s List, Thomas Kocian and his wife. They plan on restoring it for their primary residence and an office for Tommy’s law practice. This house had gotten a lot of notoriety because the prior owner had painted the outside precipitating the Landmarks Preservation Commission to jump in and landmark the house. The house is/was a wreck. The selling bank required that the “prequal” acknowledge that the house was a Designated Landmark, that it could not be torn down, and that it was in a deplorable condition in order to make an offer. Kocian had a prequal from an international well known bank that he had been doing business with for years, but they refused to issue the specific prequal, as did several other lenders that Kocian tried. Victory State Bank stepped up to the plate, and made the deal happen. Victory loaned the money for the acquisition, and gave a commitment for the rehabilitation, and after the work is completed they will refinance. If you need financing, go see Richie Boyle, head of the Loan Department @ Victory State Bank 718-979-2000. (Tell him I sent you)
Sometimes the seller bank will not give you a mortgage contingency on a property, so what you have to do is either get a loan on your own home, or other property, or go to a commercial lender like Victory that will give financing on your own home as well as the foreclosure being purchased.
But regardless of what you do, it all boils down to Loan to Value (LTV). What percentage is the bank lending of the total purchase?
The Closing
The contracts of sale now have provisions that all of the funds have to be sent to the attorney for the lender and then they will send out the deed. In other words, at the closing the only ones there may be you and your attorney at the lenders office, unless you go to the Sellers lawyers’ office. Closings that are done via wire and fed ex, are similar to how closings are done in other parts of the country.
Another difference with a foreclosure closing and a regular closing is that the buyer usually pays the Real Property Transfer Tax (NYC 1%), and the NYS Transfer Tax .4%, in addition to all other expenses. Normally the seller pays these items. Now because the buyer is paying these items, they pay the tax on the tax too. (1.4% of the purchase price, and 1.4% of the tax- don’t ask me why, makes no sense to me, other than an opportunity for the taxing authorities to make an extra couple of bucks).
Is this negotiable- NO. It is written in Stone.
What is the rationale? When the bank foreclosed on the property, they received a deed from the referee appointed for the foreclosure. In order to record the deed, they had to pay the transfer tax (1% and .4%). Since they just paid it, they don’t want to pay it again, and since they can get away with it, they do. It is called Sour Grapes.
………to be continued
Seeing the Inside of a Foreclosure
First of all, seeing foreclosures is easier than any other house. They are always vacant, generally they have been cleaned out of debris (although not always), and they usually have a lock box These lock boxes have combinations of either numbers or letters, which when set properly will release a key
There are three condo's in a building on the North shore that I have been trying to show for some time to my customer. And we just can't coordinate it. Friday we showed up, and the homeowner wasn't there. One homeowner says only after 4, and one says only before 2, and the third says wait until next Monday. Oy vey.
Foreclosures are Sold “As Is”
When you buy a foreclosure, the banks make no representations, other than good and clean title,. They don’t represent the roof is free from leaks, nor that the plumbing, heating, and electrical systems are working.
Sometimes, you can’t check things because the water has been shut off, and there is no electric on. But you can still see roof and basement leaks, and other structural items. They will allow you to bring in an engineer to make an inspection/evaluation, even after they have accepted your offer. A decent engineer can pretty much tell you the condition of everything, even without electric, gas or water. You know that the bank gave a mortgage to someone and at that time, these things worked. There aren’t that many moving parts in a furnace. You can still follow the path of damage to a unit. You know when the pipes broke, what the damage was. Leaks leave stains and odors.
Speaking of engineers and home inspections, Bill Coull, who was the first person on Staten Island to specifically do home inspections and reports died this week of cancer. I have to wonder how many people bought houses on Staten Island only after Bill said they were okay first. I knew Bill for 30 years, and I never heard a single negative thing ever said about him, or by him. He was a good guy, a good engineer/home inspector, and will surely be missed.
Making an Offer
In order to make an offer, you have to submit, in writing with proof, how you will pay for the property if your offer is accepted. If it is an offer of all cash, you must show proof that you have the cash (bank statements). If you plan on putting down a certain percentage, and getting a mortgage for the balance, then you must substantiate the cash part, and submit a “pre qual”, a letter from a lending institution that states that you have been “pre-qualified” for a loan in the amount of at least what you have put into your offer.
Now some banks/asset managers require that the Pre Qual be case specific- that it specifically mentions the property that you are making the offer on. Not a problem, as most mortgage brokers/bankers want your business and would gladly accommodate you with as many letters as you want. It’s easy since its all word processing anyway.
Some selling banks require that you get the “Pre Qual:” from them, regardless of whether you have a pre qual or not from another lender, they want you to go through them. (They want this to make sure that they aren’t wasting their time - or - to try to sell you a loan?)
Still other banks will make the financing attractive to purchasers of their inventory. Lenders like Wells Fargo, Countywide, Chase, etc. They have bitten the bullet, and decided to make the best of their situation by turning the non-performing loan into a new performing loan. These banks are in the loan business.
Finally, there are situations where there have been undocumented alterations which may render the property un-mortgageable in the conventional market. Often times in these cases the bank will offer the financing.
I had a customer who wanted a certain house, but there was an alteration that needed to be filed, so he couldn't get the 3% down below market first time homebuyer FHA deal he wanted, so he didn't buy the property, even though Wells Fargo agreed to loan 90%.
As you know from my prior emails, no one is quite sure who owns many of the loans that are merely “toxic assets”, Mortgage Based Securities’, that were the cause of the crash of the subprime mortgage industry, and the fall of wall street, etc. These mortgages were bundled in packages and sold to investors, and have ownership like Deutche Bank as trustee of series of bonds #200-212, of 2007, etc.). In these cases, there is no bank to offer financing, and the servicing company is not in the business of making new loans.
(If you are new to Lasher’s List, or just want to re-read some of my past articles including the explanation of the crash, why there are so many foreclosures on Staten Island, the role of organized crime, and all the rest., they are all posted at my blog, at http://lasherslist.blogspot.com/)
When you make an offer to buy a foreclosure, the bank generally responds in one of three ways:
1. If your offer is full asking price, all cash, and close in 30 days, they might say yes.
2. If your offer is for less, and your terms are reasonable and your financing checks out, they probably will counter at “give us your highest and best offer”
3. If your offer is too low, and the servicing agent is not having a good day, then they will not respond at all.
Even if your offer was not responded to, they do not take it personally, you can then make a new higher offer, and again one of the three above will occur.
Some banks respond quicker than others.
Sometimes a property hits the market that is in a desirable location, and lots of people see it and make offers. Sometimes the bank will tell everyone to come back with their highest and best offer, and take the best deal in their eyes.
We don't really know how they see the offers in their eyes - You would think that a stronger buyer all cash would beat out a 3% down deal for more money, but it doesn't. Sometimes higher price wins, sometimes all cash quick closing gets it. Probably depends upon the history of the particular property, how many times they've sold it, but the buyer wasn't able to get financing after a long drawn out process.
Those of you that receive all of my emails receive these BOM's which I identify as outstanding opportunities. If you do not receive all of my emails and would like to, just send me an email and I will move you to the appropriate list. (Some people only get occasional listings, but all of my news type emails and my pontifications).
Your offer is accepted/Contract signing
Now that your offer has been accepted, a contract is sent out to your lawyer, or some banks require the customer to sign an 8-18 page agreement that you are not able to make any changes to. Sign it, or you don’t get the house. It doesn’t matter whether it’s the addendum/agreement or the regular contract of sale by and between the lawyers. Sign it without making any changes, or you don’t get the house. This is just the way that it is.
One of my clients who is a well known substantial builder on Staten Island asked that the contract of sale be put into his building corporation, instead of his personal name. the bank said no, and put the property back on the market, while we prepared a new offer, for the same amount, same terms, in the name of the building corporation, and had to get a separate letter from the bank showing the funds in the name of the building corporation.
Some of the lawyers for the lenders are requiring certified funds or bank checks for the down payments. It used to be that the contract down payment clause said “subject to collection”
I think that it has to do with the fact that the bank is taking a hit, and it's a kind of like their way of getting some sort of Montezuma's revenge.
No biggie, small price to pay for the bargain that you are getting.
Financing a Foreclosure
Financing a foreclosure is no different from financing any other property.
If the buyer is going to occupy the house themselves as their primary residence, then all of the mortgages available for any other buyer is available for the foreclosure, depending upon the condition of the house. In order to get a 96.5% FHA or SONYMA, the house has to be in good shape, with everything working. But regardless of the percentage down, the house is going to have to appraise, and you still only can borrow the percentage in the particular mortgage you apply for (The loan to value of the property).
If the house is a wreck, then foreclosure or resale, the same financing is available generally. The difference is the conditions to obtain financing that the seller allows you. But if the house is a fixer upper with things not working, so that the house doesn’t qualify for FANYMA etc., then you have to go to a commercial lender to get the financing, although there are mortgage programs out there for fixer uppers- but generally calling for you to get architectural plans permits and approvals first.
My associate Don Adler and I just sold the Landmarked 1869 Bedell house in Tottenville to a young lawyer on Lasher’s List, Thomas Kocian and his wife. They plan on restoring it for their primary residence and an office for Tommy’s law practice. This house had gotten a lot of notoriety because the prior owner had painted the outside precipitating the Landmarks Preservation Commission to jump in and landmark the house. The house is/was a wreck. The selling bank required that the “prequal” acknowledge that the house was a Designated Landmark, that it could not be torn down, and that it was in a deplorable condition in order to make an offer. Kocian had a prequal from an international well known bank that he had been doing business with for years, but they refused to issue the specific prequal, as did several other lenders that Kocian tried. Victory State Bank stepped up to the plate, and made the deal happen. Victory loaned the money for the acquisition, and gave a commitment for the rehabilitation, and after the work is completed they will refinance. If you need financing, go see Richie Boyle, head of the Loan Department @ Victory State Bank 718-979-2000. (Tell him I sent you)
Sometimes the seller bank will not give you a mortgage contingency on a property, so what you have to do is either get a loan on your own home, or other property, or go to a commercial lender like Victory that will give financing on your own home as well as the foreclosure being purchased.
But regardless of what you do, it all boils down to Loan to Value (LTV). What percentage is the bank lending of the total purchase?
The Closing
The contracts of sale now have provisions that all of the funds have to be sent to the attorney for the lender and then they will send out the deed. In other words, at the closing the only ones there may be you and your attorney at the lenders office, unless you go to the Sellers lawyers’ office. Closings that are done via wire and fed ex, are similar to how closings are done in other parts of the country.
Another difference with a foreclosure closing and a regular closing is that the buyer usually pays the Real Property Transfer Tax (NYC 1%), and the NYS Transfer Tax .4%, in addition to all other expenses. Normally the seller pays these items. Now because the buyer is paying these items, they pay the tax on the tax too. (1.4% of the purchase price, and 1.4% of the tax- don’t ask me why, makes no sense to me, other than an opportunity for the taxing authorities to make an extra couple of bucks).
Is this negotiable- NO. It is written in Stone.
What is the rationale? When the bank foreclosed on the property, they received a deed from the referee appointed for the foreclosure. In order to record the deed, they had to pay the transfer tax (1% and .4%). Since they just paid it, they don’t want to pay it again, and since they can get away with it, they do. It is called Sour Grapes.
………to be continued
Subscribe to:
Posts (Atom)