Q & A with Dottie Herman

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Q1 - I have an opportunity to purchase a Fannie Mae property that needs work, 75% of which I can do myself. I plan to make an offer of about $40,000 less than they want, because the house not only needs a lot of work, but I won't be able to sell right away, I will have to rent. Is there anything I should check out beforehand? I know the house is offered AS IS, so I think I have a chance. Thanks.

A - Without seeing the property, it's hard to answer your question. Generally speaking, it's always advisable to have a qualified engineer and/or home inspector view the property before committing.

"As is" means that you are getting the home in the condition that it is presently.  An inspection can help to make you aware of defects, and can estimate how much work needs to be done to get the property ready for sale and/or rent.
 Also, check comparable sales and rentals in the area for properties similar to the one you are considering to ensure that the work won't overprice the property.  A real estate professional can assist you in determining market price.
In addition, if you do choose to proceed, consult an attorney with experience in this field, as they can guide you through the process. 

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Q2 - My father and I have the same name, and I am hoping to buy a property shortly - so I ordered my credit reports and scores.  I noticed his bad credit is showing up on my report in the form of a medical collection.  This has caused my score to drop significantly. Why is this happening, and what should I do?

A - This is a common occurrence on credit profiles for those individuals with similar or same name family members.  Unfortunately, the credit reports compile information based on name/names, social security number, and address (past and present) of each consumer.  When a consumer has the same name and has lived at the same address as their father, or son, it can be a formula for disaster to credit profiles. The credit reports can reflect either or both individual's information, whether bad or good, for the credit score.

This can be corrected by hiring a credit repair firm or going to www.annualcreditreport.com where you can order your free credit reports.  Once you download them you will see an option to dispute information.  Follow the directions and prompts for disputing errors.  If you don't have the time or inclination you can contact my company www.northshoreadvisory.com.  It usually takes 30-40 days to update the misinformation.

Although the correction will occur, the misinformation can reoccur throughout your life.  In the future it is wise to check your credit consistently, and when applying for loans, lines, or credit cards the credit must be reviewed at least three months prior.  By giving yourself a good amount of time to make corrections you will help reduce the stress of the situation.
Best of luck!

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Q3 - How can i find out how much homes are selling for in certain communities and neighborhoods?

A - Your real estate agent can give you a ballpark figure by showing you comparable listings in the area.  If you are working with a real estate professional, they may have access to comparable sales maintained on a database.

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Q4 - How large of a down payment do i need?

A - There are mortgage options now available that may only require a down payment  of 10% or less of the purchase price. But the larger the down payment, the less you have to borrow, and the more equity you'll have. Mortgages with less than a 20% down payment generally require a mortgage insurance policy to secure the loan. When considering the size of your down payment, consider that you'll also need money for closing costs, moving expenses, and - possibly - repairs and decorating.

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If you have a real estate question for Dottie, please send it to; Reporters@WorldPropertyChannel.com