Sounds like a scary home inspection. You do need to have attorney write the deficiencies to the seller attorney and make the case that several are matters of safety and habitability and Illinois has a strict property disclosure requirement. Basically, if the seller refuses to fix these items, they will need to disclose those defects to the next possible buyer. So why not just work with you on closing credit if you are willing to do the work. If this is a short sale, there is no money to repair home. It all comes down to cost and if the seller wants to get it done. If deal does fall apart, you can call the city inspector and report the property for its violations.
If you paid for this inspection PRIOR to having the home under contract, you should be armed with knowledge to make a lower offer, based on this work being finished. You could then do an FHA 203k inspection, to review HUD minimum property standards as well, and IF you find more wrong with the home, GO BACK to the seller to lower the price even again, based on the results.
If you are under contract, make sure you hit the seller with these BEFORE your inspection contingency expires.
Would be glad to help you with your renovation financing... ;)
Before you even consider a 203K loan, you need to have your Realtor pull ALL comparable sales of similar properties that have sold in the last 3 to 6 months( both before the rehab and after the rehab properties.) Once you have that information you need to get an estimate of the repairs. If the purchase price + the repair cost, + closing costs and the 20% contingency reserve ( for cost overuns) is equal to 96.5% of the after repair value then you should make your offer. If you do not follow these steps, you may be wasting your time on a home will not appraise out to the value you will need to get the 203K Loan. You can contact me for any other information you may need.
As previously said, everything can be negotiated. The primary purpose of an inspection is to assess whether there are some major issues with the property that were not originally disclosed or apparent. If the property was listed for sale AS IS- then the seller cannot be expected to complete these repairs. In many cases if these issues haven't already been addressed by the seller, he may not want to do address them. BUT then that should be reflected in the asking or final sales price.
It is best for you to consider the total costs including $ & time necessary to complete the project on your own regardless of what kind of deal you are able to strike with the seller. If he agrees to fix the seepage and mortar GREAT but be sure to keep a close eye on what's happening because in the end YOU will own it.
Thank you for the question you posted about post-inspection requests.
Whether or not it is â€œfairâ€ to request that the current owner/seller of the property you are under contract to buy make repairs to the property depends on the terms to which you and the seller agreed in the written purchase agreement.
Did you agree to an â€œas isâ€ purchase?
Best bet is to discuss this with your real estate attorney â€“ and if you do NOT have a real estate attorney assisting you with your purchase, get one NOW.
Good luck to you!
Senior Mortgage Consultant
1333 N. Kingsbury, Ste, 201, Chicago, IL 60642
Office: 312-462-7715 | Cell: 773-848-4144 | eFax: 312-873-3818
When it comes to inspections, you can ask them to fix all the materials you are worried about. Have your attorney show them the laundry list that the inspector came back with. Then have hi say instead of asking for all these things, we would just like these two major ones taken care of. If they fix them, you can feel comfortable. If they dont then you can either walk from the deal, or live with having to do the work yourself. Best of luck!
Americorp Real Estate
Brokers Associate, e-PRO
Sounds like a typical home purchase in an older neighborhood. There's no reason for you to be in this position. The solution to this simple problem is an FHA Rehabilitation Loan or 203(k). This type of financing lets you purchase the home "with" the funds to repair it and when you do this you even get a professional project manager to organize and manage the construction so there's no hassle. As a licensed FHA Consultant myself, I see these every week so I know it works. Talk to your Realtor and Lender to help you change directions. If you have any questions about the program contact me for more details, I'd be happy to help. The Rehabilitation Loan has really become the new tool of many typical homebuyers who have now turned their attentions away from new housing in considering the 203k as the best way to maintain their lifestyle in established neighborhoods
As to seepage, this is pretty common throughout Chicago in the older houses w/o sump pumps. Is the seepage widespread or confined to one area of the basement? Be careful of the water proofing companies, they're looking for the big expensive fix, when quite often grading and downspout positioning can cure the problem.
If you love the house, these problems are not insurmountable and should be considered in the overall picture including price, location and comparable properties.