Dear Michael: I am buying a house located in a “P.U.D”. What is a PUD and how does will it affect my home?
Answer: A PUD (planned unit development) can take the form of a community of attached homes or detached homes. Membership in the HOA is mandatory. The HOA fee is often used to cover insurance and maintenance. The difference between a PUD development and a condominium development is that in a PUD, you actually own the land your home sits on, and if present a back and front yard. In the case of a condominium, all land is commonly owned and maintained by the association. Buyers may prefer a PUD as with a PUD you can landscape the land you own, rather than having the HOA control it. HOA fees for PUDs are usually lower than for condominiums because there is less for the HOA to maintain. Most PUDs will not have pools, clubhouses, or tennis courts (although they sometimes do). PUD ownership is as secure as condo ownership, as long as the HOA is solvent and doing its diligent work.
Dear Michael: We are in escrow on a home that did not appraise at our purchased price. We really love the home. What are our options to move forward?
Answer. The bank will not lend you money on a property that they feel they cannot re-sell if you should default on the loan. Appraisers are appraising properties at the most current value and execute the most extensive study in order to meet the purchase value. If the home you are purchasing did not appraise for its value then according to your lender you are purchasing a high-risk investment on an overvalued home. Here are a few options which I recommend: One: Ask the seller to reduce the price to the appraised value. This is the most logical option; make your point stating to the seller that he/ she will risk having the same appraised value with a different buyer. Two: If you have the cash to make up some of the difference, you can negotiate with your seller and could meet half way. Keep in mind that there is no sense in asking your lender to loan you more money, this money has to come from you. Three: If you really love this home and are emotionally vested and ready to pay above current market value according to the appraiser’s report, then you can make up all of the total monetary difference. If you decide to make up this difference you are speculating which way the market is trending. Keep in mind that some appraisers under appraise and over appraise because of their for lack of knowledge in the area. Four: You can switch lenders and start the process all over again, but your seller has to agree, as this will delay the close. Five: If no agreement can be reached the seller or you can decide to cancel the purchase and not to sell you his/her home. It is always best to make the effort to find mutual ground with your seller in order to move forward with the sale.
Dear Michael: I want to purchase a house, which is a short sale. All the appliances have been removed including the kitchen cabinetry. Is it true that the seller has to provide a kitchen to show the house is livable in order for the buyer to secure a loan? If yes, what should I do if the seller refuses to provide a kitchen? When I made the offer, this was a short sale, but soon it will be a foreclosure auction. The bank is still considering my offer as a short sale. The owner does not care if the house is short sale or foreclosure, as he just wants to be out.
Answer: This is a very tricky position for you to be in. The short sale lender does not own the home. They have no say if there is no kitchen. They are not selling the home but rather only approving the sale at a lesser value then the loan. Short-sale lenders would rather approve the sale than foreclose on the home. On the other hand your mortgage lender will not approve your loan. I understand you’re devotion to this home…problem is, no lender will loan on a home without a kitchen. A home without a kitchen is not considered a home but more of a storage facility! This scenario leaves you with few options! The only logical options is that the seller puts in a kitchen or that you walk away and resume your search of a less problematic property. As previously stated in one of my real estate columns, short sales have no guarantees and sometimes will need to be passed up by buyers. If this home is re-listed as an REO (real estate owned/bank owned) then the selling bank will have to put in a kitchen before re-listing the house. Problem is the process can take a few months and sometimes years.
Michael Kayem is a Realtor with Re/max estate properties serving Culver City and the Westside since 2001. You can contact Michael with your questions at (310) 390- 3337 or e-mail them to him at: homes@agentmichael.com.