Most REO properties are sold in AS IS condition, and price the properties below market. AS IS does not mean that you cannot ask for repais after a home inspection...you can. But the banks do not welcome these repair requests and typically feel that you are buying at below market which compensates for cost of repairs. As a local agent familiar with these situations I recommend that you get estimates for all repairs that you will need to bring the house to livable standards. Once you have compiled your estimates, decide if you want to move forward and absorb these costs or if you want to request repairs or request a credit at escrow from the seller. Talk to your agent and discuss the value you are getting with the home, consider the market, the purchase price and if it is worth the expense. What is important is that you have options and until you decide what you want to do. DO NOT REMOVE CONTINGENCIES before you know what you want to do. Once contingencies are removed you are stuck with either the house as is or you will lose your earnest money if you back out of contract. Again, talk this out with your agent.

you can always pay full price! Be happy you got a deal

You really need to be speaking with your agent about this.

I can tell you from my experience with my buyer clients that once you are in escrow with a REO, the bank uually will agree to reasonable credits for repairs. A lot will depend on how close to the listing price your offer is. Once the asset manager from the bank has moved a file from the huge pile of available properties to the small pile of deals in escrow, they don't want to move it back. They generally will not lower th eprice, but may be wiling to give you a credit in closing or sometimes actually get the repairs done.

You agent should be on top of this with you

Hello Amy,

You might be able to lower the price or you can request a credit for recurring and non-recurring closing costs. Ask your agent to put the request in writing which you will need to sign before it's sent to the other agent. The bank may or may not give you the credit or reduction you are asking for.

Good luck.

Monique Carrabba
The Reavis Group
Keller Williams

Ask your Realtor to contact the listing agent for the mortgage lender quickly with that question. All REO properties as sold "as is" but most typically with the right to inspect in order to discover such problems. If you are not willing to accept the home "as is" then you should back out with a concurrent offer to try to negotiate through your Realtor, who may or may not be the listing agent for the property Either way, as in any negotiation, this opens the possibility for the lender to reject your offer. Be sure that you act within the required inspection report time period in writing, so that you do not risk losing your escrow deposit and/or be sued for specific performance to buy the home.

The mortgage lender will then have the choice to accept your counteroffer or move on to another offer from another potential buyer.

Hi Amy,

Are you represented by an agent? They should be advising you.

The banks state the property is being sold "As-Is". Literally, your discovery period is to decide whether you want to buy the property with any defects you detect, or to cancel your transaction. The problems you mention are fairly minor and should be considered as part of the overall offer as to whether you are getting a good deal or not.

With that said, you have nothing to lose by drafting a request for repairs document and asking for a monetary credit to repair these items. The chance of the bank fixing items prior to closing is slim to none, but they may offer you a credit if you negotiate correctly. Hopefully, your agent knows how to play the game. Lowering the purchase price is usually not done due to appraisal and loan issues.

Remember, any credit also needs to follow your lender's guidelines. If you are doing a 97% FHA or 100% VA loan, you may need some creative ideas to make sure you have some money in your pockets after closing to address the repairs. A good agent, escrow officer, and loan officer will have some suggestions. If you are bringing in a decent down payment, the credit will just reduce the amount of funds you will need to bring in to close.

It's a tough market right now since buyers seem willing to pay a premium to buy bank homes which are in decent shape because the short sales are too painful, and the regular sellers are not pricing correctly. So you also need to consider if you do cancel this transaction, is there another home out there for you. No home is perfect...