Got our preapproval for a USDA Guaranteed loan but can't find a house!

[doodlebugger]

Sorry, but I think all my other threads are confusing which is why I am starting a new one. We finally got a preapproval for a USDA guaranteed loan, but now we can't find a house in our price range in our area!!! That is just our luck! So, how long do we have until they will have to re-do the paperwork - the loan officer told us the credit is good for 90 days, will they do anything else at the end of our 90 days. I surely hope it doesn't take us that long to find one, but I live in a rural county in Kentucky and there just simply are no houses in our price range - they are either very expensive, or they are run down shacks. I'm starting to panic a little because we struggled so much to get this loan in the first place, and now all the houses we were interested in are sold. We can't move out of the county for several reasons. Don't know what to do now other than to wait for some new properties to be listed........

[Chupacabras]

The market is nuts right now, good houses go immediately and bad houses/overpriced houses stay on the market for years. It's not the buyers market everyone makes it out to be. Nice places priced right around here go into bidding wars if they list for more than a few days.

 

I'll tell you what we did to get under contract:

 

Make sure your realtor is getting you trend listings the day they show up

 

If there's a house you want to see, make sure the realtor will get you a showing immediately (within two days)

 

If you like a house, move on it immediately. Don't think about it for a few days.

 

Depending on the number of viewings before you and scheduled after you, tell your realtor to make an offer for the asking price either that day or the next morning. USDA, FHA and VA loans can absolutely queer a deal, you don't want there to be any excuse not to take your offer.

 

I think you can get an extension on your loan, but I'd let someone else with more knowledge of that to give you a surer answer.

 

Horrible experience. We don't close for a few weeks and it can't happen soon enough.

[luckydriver]

just addressing a comment above regarding moving immediately..you can always put contingencies in the agreement and lets face it. every single home inspection comes up with 'something'..so you could get out of the house if you really wanted to.

 

of course time is wasted then though.

[Chupacabras]

just addressing a comment above regarding moving immediately..you can always put contingencies in the agreement and lets face it. every single home inspection comes up with 'something'..so you could get out of the house if you really wanted to.

 

of course time is wasted then though.

 

Move on it, not in it.

 

Putting the seller up against a wall by giving them an immediate offer they have to respond to is what I'm talking about; the settlement date can be negotiated.

[jop3]

just addressing a comment above regarding moving immediately..you can always put contingencies in the agreement and lets face it. every single home inspection comes up with 'something'..so you could get out of the house if you really wanted to.

 

of course time is wasted then though.

 

Move on it, not in it.

 

Putting the seller up against a wall by giving them an immediate offer they have to respond to is what I'm talking about; the settlement date can be negotiated.

 

 

Lol, "move in it". I have this vision of doodle showing up with her contract offer in one hand and a suitcase in the other to give to the seller. Just being silly

[doodlebugger]

Jop3,

That might not be as silly as you think with our current situation! LOL

 

This is so frustrating! We got rid of one realtor already, and then the house (FSBO), I was convinced was going to be "it" was a big disaster and wouldn't qualify anyways, and then the couple of other houses that were on the market just in the last two weeks are already sold, so it left us with either abandoned and run down doublewides, or very high end expensive properties, or properties that had a pool or barn (our lender told us these are the two most popular issues with being disqualified for USDA loan). I live in a small rural county in Kentucky (I think last check the entire county is USDA approved), and all summer there have been some great houses on the market, and it has suddenly dried up!!! We can't leave the county school system for a variety of reasons (one is due to a legal issue we have been fighting with the school system for my son's IEP - if we leave, we forfeit). We finally found another realtor, but he hasn't provided us with a list, and we told him how important it is to look at houses in the next week.

 

I have another house hunting related question for you guys --- Are you looking at houses within the price range that the lender has given you, or are you looking at houses a little higher than you can afford (in hopes of pricing them down)? I have no idea about what strategies to use with this situation - what is a reasonable distance between the preapproved price and the asking price to be looking at??? I mean, if I was, for example, approved for 100k, can I look at houses with a reasonable expectation at the 120k level, 140k level, or higher? I mean I know I am dreaming to think that an owner might knock off that much, but if they have been trying to sell for 6 months to a year, is it possible that a seller could consider knocking off as much as 30-40k from their asking price??? I'm guessing probably not....but a girl can dream - right???

 

Any strategies for finding houses not on the MLS or Craigslist? Our little local paper doesn't really have anything except abandoned doublewides. Nothing wrong with a doublewide, but if I am going to live in one, it will be new, but they are too expensive here after you add a piece of land and land improvements. Plus the resale value here is not good, and our hope is that once our children graduate high school in less than 5 years, we will likely sell and move again or build a home.

[doodlebugger]

Anyone know if they allow a house with an above ground pool? We found a HUD REO house that is reasonably priced. We are not thrilled with the location, as it is about 10 minutes farther away from the schools than we are now, but we are keeping our minds open if other houses don't work out.

 

Also, does anyone know with a USDA guaranteed loan, can you borrow a little more if the house needs repairs??

[a-baum]

The USDA guaranteed program does not have any specific "features" that allow for borrowing extra for repairs. However the program has room to wrap a lot of your closing costs into the loan, depending on the appraisal, so you could close with little cash out of pocket, and use any savings/cash you have for repairs.

 

I don't believe USDA cares about above ground pools because they aren't permanent. USDA has a problem with in ground pools though.

[doodlebugger]

That's all good to know a-baum. The HUD REO turned out to have a lot more expensive problems than they were estimating (HVAC, roof problems, needing replacement of the tubs and sinks in the house, etc.). The realtor we were working with did not feel confident with our area, so he passed us on to another realtor who seems to know his stuff. Going to look at houses the next couple of days.....hoping there will be some more posting to the mls in the coming weeks....so far, what's out there is not to our liking.

[a-baum]

Sorry to hear that you have this preapproval and can't do anything with it. Must be frustrating. However I would caution against being in such a hurry to find a house that mistakes may be made along the way or you will feel pressured into buying something you don't necessarily want. May I ask what the rush is? If your preapproval came through, I would think if you kept your credit in good shape that you shouldn't have an issue getting another preapproval if/when that one expires if you haven't yet found a house. Take your time. I am sure a house that is perfect for you will come along.

[548ficoNtexas]

are you looking on realtor.com? I use that site daily and it's always very updated unlike zillow or trulia

[Chupacabras]

are you looking on realtor.com? I use that site daily and it's always very updated unlike zillow or trulia

 

Still too slow in this market, you need the trendmls listings that come directly from a realtor.

[548ficoNtexas]

Ok I guess it depends on where you are, I see houses that are just listed minutes ago that literally dont even have a picture up yet. Sometimes it's 2-3 hrs before the pics are on there. I know when ours listed it was on realtor.com in about 10 minutes. But our market is slow here.

[Chupacabras]

It was taking a few days here; I'd hate to lose an opportunity because someone beat me to the punch.

[doodlebugger]

The only reason I am in a bit of a hurry is because our current house is in foreclosure and we don't know when we will get the notice of sale. But, we also do not want to rush things. I'm just frustrated because we have to stay in our county due to some major issues with my son's IEP that we are currently fighting (if we move out of the county, his rights will be forfeited and we have to start all over again). There is nothing in our county in our price range that will qualify for USDA. That's what I get for living in a small rural county in Kentucky. We use realtor, zillow, our local multiple listing service, etc. We have called every FSBO house we could find, and we have appointments to see a few houses in the next week, but even the realtor said that it might be very difficult to find before spring. Then I keep reading about all these things that could possibly happen - like prices going up, or USDA loans being affected by the upcoming election, etc. I am working against time here....that's why I am freaked out. Plus, with the FAKOs that we are monitoring, our scores keep moving around, and I am worried that we might not have a qualifying mid score in 90 days. We had some things fall off that were IIB and we are still disputing a couple of things. I'm just anxious....is all. Dh thinks I'm silly for being so anxious.....but we didn't think we would ever get the preapproval and now that we have it, I don't want to lose it.

[548ficoNtexas]

I completely understand your frustration. All I can say is keep hope and keep looking. I spend hours a day looking at houses on different sites which is kinda silly since we dont have a contract on the one we are selling yet, but I want to be prepared I guess. I know how frustrating it can be especially in the situation you are in. I live in a rural area of Texas so again I understand the market isnt' like metropolian areas. Keep us updated.

[deemac]

We just went under contract on a home near Boise ID and the market there is totally nuts. You're absolutely right. People think it's a buyer's market. This was the fourth house we offered on. The first three all had multiple offers and sold within days of hitting the market. Our realtor told us this week that she had just heard at a regional meeting that appreciation in that area has been 20-25% year to date! The problem is with the entry level homes, and I concur with the advice to get a realtor who understands the situation and who will get you in to see a new listing right away. Good luck!

Edited September 19, 2012 by deemac

[a-baum]

Deemac I agree the Boise area is nuts. Where are you looking if you don't mind providing more specific details. I owned a house in SW boise in the Charter Point development off Maple Grove and Lake Hazel roads. I bought it in 2006 at the peak for $177k. Short sold it and closed May of 2012 for $97k. Zillow estimate is now $91k. But talking with some friends who are still out there they say the market is crazy like you say. Multiple offers on the affordable homes. My realtor friend out there can't believe what he is seeing. All the people like me who walked away are becoming eligible again and seeing as many houses dropped 50%, are getting in for dirt cheap.

[deemac]

Deemac I agree the Boise area is nuts. Where are you looking if you don't mind providing more specific details. I owned a house in SW boise in the Charter Point development off Maple Grove and Lake Hazel roads. I bought it in 2006 at the peak for $177k. Short sold it and closed May of 2012 for $97k. Zillow estimate is now $91k. But talking with some friends who are still out there they say the market is crazy like you say. Multiple offers on the affordable homes. My realtor friend out there can't believe what he is seeing. All the people like me who walked away are becoming eligible again and seeing as many houses dropped 50%, are getting in for dirt cheap.

 

Our realtor told us the tightest market is for homes under $200k, especially in the $150 range which is what we were looking for. I don't think it's the same for more expensive ones, but there is so little inventory that anything decent in the $140-$150 range is getting snapped up almost immediately. It's also really weird to be comparing mortgage rates below 4%. Our first house was at 10%. The one we're buying is in Tumble Creek sub in Meridian. South of W Ustick, W of Linder. We started looking in June but weren't really able to buy before mid-August. Since then this was our fourth offer and I wasn't really happy with the counter, but we were afraid if we didn't take it we'd be going into the holidays soon with even less going on the market. Don't believe Zillow though; it has really not caught up to the reality of the current market.

[doodlebugger]

After getting rid of the third realtor from you know where, we are now with a fourth realtor and she called and said there is nothing in our price range that is USDA eligible. She said that a lot of people in our area will pull their house off the market in the fall and wait until spring to relist. I don't have that long.....at least I don't think I do. I need to start getting creative.....how would you find a house in the area you live if they are not on the multiple listing service? We have drove around our entire county and the FSBO houses we have found are way way overpriced, they won't come down, and they won't allow a realtor to be involved. As I said, we cannot leave the county right now due to a legal issue with my son's IEP (if we leave, we forfeit and have to start all over - it's been a 2 year process to get a "win," but it's not over yet). Dh and I are tempted to put in an offer on houses that are about 30-50k out of our budget since they have been on the market for a while.....but our realtor said she doesn't think that any of the sellers will go for it, but she has been surprised before, as she had a seller accept 89k on a house that was listed for 129k. Anything is possible, but it's looking really grim right now. So frustrating to work so hard to get the pre-approval and then not be able to find a house!!!!

[Chupacabras]

Don't lose all hope, just keep diligently looking at listings! Less people listing, but also less people looking.

 

The way I look at people who list too high or won't involve a realtor is they really aren't interested in selling. Maybe it's different where you're looking, but doesn't sound like it to me. My rural experience is nil so could be completely off base.

 

Good luck, can't really offer any more advice than that.

[doodlebugger]

Thanks....we are still looking at listings. Our realtor is very willing to make some "low ball" offers to see if anyone is desperate enough to sell at 30-40k off the asking price, but I am not hopeful - I would have thought most of these houses have had low ball offers all ready. I really need some new listings to open up. We have looked at every house in our price range+10k, and had no luck finding something. All the houses that we liked are already "pending" so we watch daily in case one of those contracts fall through. There are a couple of REO properties, but they want too much money. We did find a modular home, but it's pretty far from the schools and at the upper end of our budget and it doesn't have even half of what we wanted. I'm trying to be patient, but that's hard to do knowing there is a time bomb just waiting to go off (the pending foreclosure on the house we are living in). I am not good at waiting!!!!

[luckydriver]

does the loan officer knwo about the foreclosure or is that the purpose of the rush? reason i ask is another poster in the forum has an issue which sounds similar to this one, if i'm reading it correctly

[doodlebugger]

Yes, we fully disclosed everything. USDA Senior Loan Analyst said the bk7 discharge date as long as it is more than 36 months will override the foreclosure. The purpose of the rush is that I don't want to have to rent something when I know it will be temporary. I would rather move from this house into my new house before they foreclose so I don't have to rent and break a lease. Besides, rentals are even harder to get around here than houses. We will eventually have to settle if we cannot find one and they proceed with the foreclosure......I just really didn't want to settle for something I won't be happy with. But, I guess we could always move in, stay for the winter, and try to sell the house in the spring when there will likely be more listings. It's something that we have thought about, but we won't settle until we know that we are down to the wire.

[jst300z]

said there is nothing in our price range that is USDA eligible

 

Perhaps this is your biggest obstacle. Like trying to find a home in New Orleans that is NOT in a flood zone.

 

Obviously a conventional loan would give you more options, looks like there are many people in your area utilizing this program thus eating up the small qualified inventory.