I had an interesting experience yesterday that I thought that I would share.  Let's start at the beginning.  Late last week a young couple who had never bought a home were referred into me by one of my Realtor partners.  Like most first time Homebuyers, they were very excited to get started on this adventure.  They had done quite a bit of exploration online regarding buying a home, and obtaining a mortgage.

We had two phone conversations prior to them coming into my office late yesterday.  In both of the conversations, they had mentioned a couple of auction web sites, but as they were already working with one of my Realtor partners, I didn't give it much thought.  They also had mentioned that there was a home locally that they were in the process of 'falling in love' with.  The only negative that they could see was that it would probably need to be re-roofed and the carpet would need to be replaced.

With that in mind, I gathered Renovation Mortgage information for this couple, to give them something to compare.  Both programs that I presented were Renovation programs, one FHA 203k and the other Fannie Mae HomeStyle.  Once they were seated in front of me, we discussed the merits of both programs, and also the fact that they would need to line up a General Contractor.  Then they mentioned that the home was 'listed' on an Auction Website, that will remain unnamed.  That's when things turned ugly.

I had not heard of this website before.  I asked my clients questions regarding this particular 'Seller', and they did not know the answers.  So we went online together and to this particular 'Seller's' auction website.  After reading some of the disclaimers, it was obvious that the homes that this Seller was representing were distressed.  Aditionally, they required a 30-day Closing and the Buyer to put up a 4 1/2% Buyer's Fee.  This I would assume to cover any Realtor commissions?  Further investigation revealed that this Auction Website (seller) was on it's fourth name change, had many negative comments throughout the web from previous clientele and Realtors (we could not find one positive comment to their benefit), and was owned by one of the worst Sub-Prime Lenders that miracuously survived through the Great Recession.  The couple decided that there were too many red flags.

In summary, find a Local Realtor, and use a Local Lender.  Remember, if it sounds too good to be true, then it probably isn't true.

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