REO Sale... Is This A Risk Or Opportunity???
I have been in the process of purchasing an REO property. It has a log home and a second dwelling not permitted by the county. During my research of needed rehab, the listing agent for the bank has contacted my agent today to let us know the bank now has lowered the price from $240K to $170K. (which is below market for a single residence on that much land in the area). The stated reason for the big drop is because of a previous offer, and more important, because they are relisting it as a "Land Sale" not as residential. My questions are, does this have any impact for future resale? Does it change anything with the county in regards to the structures which I plan on rehabbing? What other considerations are there? As there is no time for inspection, nor will the bank accept an offer with a contingency, what do you reccommend?
Are you saying that there are two dwellings on the property and is currently a non-conforming use?
Would you be required to demolish one to conform to local land use law?
What's the land worth vacant?
Would you be able to insure the property since it's non conforming?
I recommend due diligence... don't be pressured by a bank's reduction in asking price... or a broker's desire to get it under contract.
I would need more information on the non conforming use.. If it has been there for some time it likely is "grandfathered" in. If not a few discreet enquiries to the building dept. (without mentioning addresses etc. might be in order to see what would be required to make it legal. If rentable I would do that and call it a money machine and not worry about conforming or nonconforming uses. In my last neighborhood in SLC there are a ton of basement or mother in law apartments for rent and almost no9n of them are conforming but who cares, it is still and extra $500 amonth and nobody complains.
IF the price is right on the property for the one dwelling then go for it an consider yourself lucky..
[addsig]
Here are some answers....
Yes, there are two dwellings on the property. The first is a log home, which was permitted and built in 1978. As for the second dwelling, it is an unfinished home, and was NOT permitted, septic tapped into other home. The county became aware of this second home last year, and are now referring to it as a "shop" even though they know it was used as a dwelling. My agent does not believe it is non-conforming, but is going to confirm. So far, none of the records, nor when my agent spoke to the county, did anything state any requirement for demolition. As for the value... Land only - price average to slightly high, Land with one dwelling- priced below market by $50K +. ( although needs approx $20K rehab) And of course, land with two dwellings, darn good deal. How does the status of conforming affect things, ie: insurance, etc. ?? Thank you for your advice!!