If you really want this house, consider a 203K rehab loan. This loan allows you to do the repairs after closing and roll the cost of the repairs into one monthly payment. The rates are very competitive. There are additional costs associated with the 203K loan.
Should you elect to go with a 203K loan, your realtor should be able to negotiate a reasonable price for the property since the bank won't be doing the repairs. Getting the house at a good price is critical to closing this type of loan because the maximum loan amount is based on the future value after the repairs are done.
I also suggest you ask a General Contractor to meet you at the property to give you an idea of how much the repairs may cost. I would use this to renegotiate the price.
There are two versions of the 203K. The Standard and Streamline. The Standard version can be used for mold remediation, replacing the roof, painting, etc. The Streamline is for less extensive repairs or one or two projects. (See my blogs on the 203K Rehab Loan on Trulia for more information.)
Hope this helps,
FHA 203K Rehab Specialist
Freedom Mortgage Corp.
Are you being represented by a realtor? You should have had a inspection at the beginning of the transaction. If you had, the roof issues could have been addressed then. At this point, you can ask two independent contractors to provide 2 estimates for the repairs. Then present the bids to the bank. Perhaps, they will consider the lowest one and adjust the price accordingly.
Best of luck to you!
Water issues are a major problem in many short sales and bank owned homes. because many sellers do not have the money to repair, then the house sits for months and months.
The listing Realtor should have advised the seller and lender that steps needed to be taken to protect the integrity of the construction. Most lenders will take step to at least have the roof covered with tarp. Failure by the listing Realtor, seller and their lender to protect the property from outside elements only falls on you as the potential homebuyer. Your concerns about water damage and mold are valid.
There are deadlines in the contract including notifying the seller and their lender IF you do not approve the inspection report and you are not going forward with the sale with a demand for the return of your deposit.
Contact you agent asap and confront the issue.
In future, when you see signs of water damage......... you CAN shop on.
Phyllis Crosby, Realtor/GRI
REMAX Top Notch Associates
Tampa Bay, Florida
Since you offer was accepted by the bank I doubt that will renegotiate the price. You have contingencies of home inspection satisfaction, which protect your rights to cancel the contract, and you are very concern with damages and repairing costs, then you should cancel it and look for another house, just remember bank owned and short sale properties are sold AS IS, so be careful with the next house
As you may know, water or mold damage can be very expensive to address. As such, I suggest, in addition to obtaining an estimate from a General Contractor, you should contact a company that specializes with water damage/mold remediation (Serv Pro?) They can give you also a ball park for the repairs.
I think once you get those figures, you will be better equipped to make a final decision regarding this property.
Please note, if you decide to go forward, the FHA 203k Rehab Loan holds back an additional 10% -15% contingency to cover unexpected problems that may arise once the work has started. If the contingency is not used, then it can be applied to your mortgage as a principal reduction or used towards other improvements.
I would also ask your Realtor to find out why the previous deals fell through. The Listing Agent should be able to give you general reasons for the fallout. Was it due to financing? Borrower didn't qualify? Was it due to the appraisal or home inspection? "Your" realtor needs to step up to the plate!
FHA 203K Rehab Loan Specialist
Freedom Mortgage Corp.
Banks are getting tougher and at this point if they already did a BPO, you won't be able to negotiate enough to make it worth your while.
Faith Home Loans
Our recommendation is to review and thoroughly understand your agreeement prior to making any definitive decision. To be on the safe side, you may want to refer to an attorney for their advice!
I do have a realtor and he is kind of downplaying the problem in my opinion. If the property has been exposed to the elements for at 6 months and shows water stains on 3 rooms in the house, we're not so sure we are ready to dismiss the problems as minor.