Northwood Dr 4106

$175,000
Sold/closed Jan '07

4106 Northwood Drive

This is a large hillside-ranch plan: what you see from the street is only the upper level. That upper floor has all the main living areas, kitchen, living room, dining room and a large solarium with windows on all side, plus two bedrooms and a bath.

The lower level has two more bedrooms and a family room plus utility and bath and opens out into the large back yard.

There is a garage detached from the home on the northwest part of the property.

This is a bank-foreclosed property. The interior was repainted. Bids to replace all floor coverings are running in the $6000 range. There is a replacement range in place. The information package contains a list of appraiser-identified defects which are built into the listed "as-is" price and are therefore the buyer's responsibility. If a buyer's lender requires repairs as a condition of financing the seller reserves the right to refuse to terminate any sale agreement. Please contact Niel Thomas by e-mail or using one of the push-and-talk contact buttons above or below for up-to-date information.

Buyers of institutionally-owned properties that are marketed "as-is" with known defects and need for repairs do not generally obtain financing from lenders that will require repairs prior to allowing a loan to close. (This is the common scenario for high LTV loans, and loans guaranteed by FHA and VA.)

Instead, these buyers have the ability to pay cash for the property, or make a large down payment. With large down payments, conventional lenders are more willing to allow a purchase to close with the property in "as-is" condition. This is especially true where the borrower has demonstrated the financial capacity to fund the cost of repairs after making the down payment and closing the purchase loan.

Another purchase approach is for the buyer to prearrange or make use of an established line of credit at a full-service lending institution, or a financial services brokerage firm. These lines of credit are often secured by different pieces of real property, or a business, or personal residence, or some combination of these.

A final approach to consider is Alaska Housing's Rehab Loan Program. This is a second loan that can be used after closing, to make repairs. The borrower gets a first loan based on the "as-is" value of the property (which needs to meet or exceed the purchase price of the sales contract). The appraisal also specifies the "as-repaired" value, taking into account what needs fixing, to a limit of $30,000. As closing these additional AFHC funds are placed in escrow to pay contractors, or the out-of-pocket (not labor) of the buyer, if the buyer is qualified to do any or all of the work.

In the case of this property, the standard purchase agreement forms used by this institutional owner give the seller the right to terminate any purchase agreement if the buyer's lender, based on that lender's appraisal, determines that repairs must be made prior to closing. It must be understood that the risk of this scenario is entirely upon the buyer. The buyer must work with the lender to originate the proposed loan, perform and pay for all due diligence on the condition of the property, and pay for the appraisal, if the lender requires one. (If a termination occurs for this reason, earnest money deposits are refunded to the buyer, however.)