I think you need to talk to the seller. Tell them what you have found out and how much it will cost to fix it. Ask if you can get a deal to lower the price. Negotiate and see what you can work out. If you really want the house, then there's no point losing it without trying to keep it. After that decide if you can live with buying it for the price you can get the seller to agree to and fixing the house. You need to make the best decision for yourself. It's important to make sure that you are comfortable with what you are getting into.
One of the most interesting things I've learned as a real estate agent is how many loan products are available. As the previous person mentioned, there are rehab loans that can sometimes address these types of issues.
I think that it's important to shop around for a good lender who isn't afraid to roll up their sleeves and do this type of loan.
There are some agents who may not be familiar with those types of loans or may even feel intimidated by the process. Some loans are easier to do than others.
And, it is also very possible that your agent is trying to avoid causing you frustration and anxiety because these homes often can be very difficult to finance. You can let your agent know that you understand these types of purchases don't always go through, but that you are willing to give it a try.
Also, there are specific government websites that offer direct bank owned properties and it can be helpful to have a professional real estate agent guide you through that process. Sometimes these properties require a pre-approval with a specific lender but that doesn't mean you have to use that lender as far as I know.
http://www.hudhomestore.com or http://www.homepathcom.
The other thing to note is that even in a multiple offer situation, the first accepted offer can fall out of contract (and often does), so it's a good idea to get an offer in, even if you think you will get outbid.
Once a property falls out of contract, it can be a good moment to get your offer accepted by default. I guess what I'm saying is that if at first you don't succeed, try and try again, but also nothing ventured nothing gained.
Work with an agent and a lender who doesn't mind doing the more challenging work that is sometimes involved in these types of properties.
I hope that helps!... more
Yes, this is a service your real estate agent can do for you. It's called an "urgent need" letter and targets a specific area in the neighborhood that you request. The letter is customized for you, providing the prospective seller with specifics, such as characteristics, how many bedrooms and baths required, range of size for home and lot, whether you want a fixer-upper or a move in ready ("turn-key") home, etc. I also include a range of price my client might be willing to pay, but I don't like to be too specific because this could indicate a willingness to pay more than what the home could be worth.
Though I mostly work in the Valley of the Moon area in Santa Rosa, Ca, I have clients who are looking in a very specific area of West Petaluma. I send out letters that are customized for my client with the sole purpose of finding the right home for my client, however, if I happen to find a seller or buyer that doesn't meet the criteria, then it's a bonus for me. Everyone wins!... more
Not unless you were planning to change the heating system anyway. Review the cost difference per unit of heat - propane is not nearly as inexpensive relatively speaking as Nat Gas - and I think you'll find your time to recoup your investment is much longer than you'd think.... more