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Old 03-27-2014, 08:35 PM
 
119 posts, read 223,067 times
Reputation: 188

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I looked at a 2500sqft home this week that needed a lot of cosmetic work including paint, carpeting, and linoleum or tile in kitchen and bathrooms. It was a foreclosure and I assume the previous owners tried to install some wood looking plank in the living room and all four bedrooms but didn't do it correctly so the boards pop up in a few places. The carpet in the dining room and upstairs den is basically garbage and lineloum in upstairs hall is coming up. The board under the sink's garbage disposal is caving in from a leak I presume, but the rest of the cabinetry appears fine.

The home was built in 06 so I can't imagine it having too many other problems and is listed at a ridiculously cheap price for the size. My realtor says it shouldn't cost more than 10k, probably less, to fix what would be required for the loan to go through. He also said he knows the seller will take 15k less than asking. I don't want to spend any more money out of pocket so would it be possible to offer close to or asking price and have the seller give an allowance for the repairs? If this is possible, what's the process? Someone does the work and waits until we close to get paid or do we close and then have the work done? Also how much are sellers allowed to give for repairs?
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Old 03-27-2014, 09:39 PM
 
16,128 posts, read 17,034,531 times
Reputation: 22919
You can offer close or asking price and ask for a cash credit after closing of whatever amount for repairs.
Once closed you get a check for the amount you agreed to credit back.
Sellers can give you whatever you negotiate.

My buddy negotiated 10 k cash credit back after closing for a new roof
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Old 03-27-2014, 09:55 PM
 
119 posts, read 223,067 times
Reputation: 188
Quote:
Originally Posted by Electrician4you View Post
You can offer close or asking price and ask for a cash credit after closing of whatever amount for repairs.
Once closed you get a check for the amount you agreed to credit back.
Sellers can give you whatever you negotiate.

My buddy negotiated 10 k cash credit back after closing for a new roof
Wow, I didn't know they would give cash back. I'm concerned because this will be a FHA loan and may not pass inspection.

There were no holes or smells from the carpeting but it was extremely dirty with huge one foot diameter stains on it, nearly covering the entire areas. The plank pop ups aren't high enough to cause anyone to trip but do need to be redone. The bathroom and kitchen linoleum was in ok condition just dirty and ugly and didn't meet with the carpeting or plank in adjoining rooms. One inch of bare floor was visible. There was no stove either and I think that's mandatory. It looks like the previous owners pulled up the upstairs linoleum half way and just left it. There is also no carpet on the stairs. The paint isn't peeling anywhere but there are some big white spots (over beige walls) for some reason.
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Old 03-27-2014, 10:33 PM
 
Location: El Dorado Hills, CA
3,666 posts, read 7,904,196 times
Reputation: 3743
Ask your lender, not us.
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Old 03-28-2014, 05:45 AM
 
16,128 posts, read 17,034,531 times
Reputation: 22919
If you're gonna play the give me something game you do it when you're close to the end of your due diligence/inspection contingency

And this game is played over and over
Put in bid for close at or higher than asking
Bid gets accepted
You put down your good faith deposit
Start your inspection/due diligence ( you will have x amount of days to complete it)
When you get to your next to last day (last 48 hrs) you now dragged the sakes process as far as you can and now you go back whining to the seller about how bad shape the house is in and all the work you need to put into it and you will resubmit your offer to whatever you want cash back 1 million dollars discount or whatever else
At this point the seller will either fire back a great f you go away or start negotiating further because now you took up a bunch of time and tied up the house.
Good luck with your purchase. I know some realtors don't like this tactic either.
Disclaimer
I DO NOT agree to this tactic but I recognize there are times when the need for such tactic is unavoidable or needed if the seller hid things. Especially major things. I have done this in one house that was a pig with lipstick case. But if the seller was honest and you knew the house had issues when you came in then you're just a dirty player.
I have seen and lost bids to this tactic. When the house finally sold months later the selling price was a lot lower than my offer.
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Old 03-28-2014, 09:27 AM
 
Location: Philaburbia
31,043 posts, read 56,797,982 times
Reputation: 51738
Quote:
Originally Posted by meowkitty27 View Post
I'm concerned because this will be a FHA loan and may not pass inspection.
FHA does not concern itself with trivial issues such as paint and carpeting.
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Old 03-28-2014, 09:44 AM
 
Location: Long Island
9,010 posts, read 18,215,166 times
Reputation: 4709
Quote:
Originally Posted by Ohiogirl81 View Post
FHA does not concern itself with trivial issues such as paint and .
FHA may not care about color or stains, but FHA definitely cares about peeling paint!!
While this may not apply here, the blanket statement that they consider paint issues trivial and of no concern is inaccurate.
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Old 03-28-2014, 10:01 AM
 
Location: The beautiful Rogue Valley, Oregon
6,733 posts, read 14,448,276 times
Reputation: 8661
Quote:
Originally Posted by meowkitty27 View Post
The home was built in 06 so I can't imagine it having too many other problems and is listed at a ridiculously cheap price for the size.
This may also mean that the cost of the repairs is already factored in to the price and they may well say "no." You can always try, but if it has been priced low to move quickly, then you may well be in a multiple offer situation as well.
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Old 03-28-2014, 12:24 PM
 
Location: North Beach, MD on the Chesapeake
31,643 posts, read 38,604,934 times
Reputation: 39987
You may be able to do as my oldest son just did and get a loan with rehab funds included (don't remember the name). It does have some performance targets for completion included but the loan ended up being for the amount that the house was listed for. I didn't explain that well. His mortgage is for the listed price (minus his 10% down) but a portion of the loan is rehab money. The actual price of the house is lower than list.

It also was a foreclosure.
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Old 03-28-2014, 12:46 PM
 
Location: northern va
1,542 posts, read 1,965,485 times
Reputation: 1323
Quote:
Originally Posted by Ohiogirl81 View Post
FHA does not concern itself with trivial issues such as paint and carpeting.
peeling paint or faded exterior painted trim can be dinged on an appraisal
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