Home Buying in 89117>Question Details

Janet Spelman, Home Buyer in Morgan Hill, CA

can I ask for repair money from the bank (seller) when buying a short sale?

Asked by Janet Spelman, Morgan Hill, CA Wed May 2, 2012

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Hi Janet!

Let me clear up something about short sales first. The bank is NOT the seller; some regular person just like you (who happens to owe more than the home is worth) is the seller. However, because the bank stands to lose a lot of money on the deal, the bank gets to *approve* the sale.

That being said, I would recommend asking for the repairs to be made prior to close, particularly if it's something that your lender might demand be fixed. The worst case is that the seller says no. I have seen banks agree to make some repairs such as fixing a broken window prior to close.

As for asking for money to make the repairs yourself, this is less likely. The way the bank sees it, that's money that could be theirs.
1 vote Thank Flag Link Wed May 2, 2012
YES - absolutely you can always ask.. Whether or not you'll get it is a different story.. What you can do is submit a lower offer based on the fact the property needs repairs. Have the repair appraisals in writing and present them to the bank.. I got a house in Lamp Light Glen it was valued at over 400k we negotiated with the bank and they came back at 270k..The house needed 70k in repairs..

0 votes Thank Flag Link Mon Mar 23, 2015
The simple answer to your question is: YES - absolutely you can always ask. Answering the question, "Will the bank give me what I ask for?" is not so simple. If there is a repair that will hold up the sale as an appraisal condition where the bank you're borrowing from is not okay with lending money on a property that is not habitable, such as a bad A/C problem in the 110 degree summers in Las Vegas, the answer would be: MAYBE. In the event where there is an appraisal condition and the bank is not willing to pay for the repairs needed... but you as the buyer are prepared to incur those costs so that you can enjoy an opportunity to buy that $250k home that sold for $450k just 5 years ago... I've seen what they call an escrow hold where you put the amount needed for repairs into an escrow account to get the appraisal condition removed and after the close of escrow the contractor who does the repair work gets paid through the escrow company.
0 votes Thank Flag Link Tue Aug 28, 2012
I agree with David.

Unless you are buying multiple properties and you have time to wait months and months to possibly get a house, stay away.

With that said, short sales are good for those who buy multiple and can be patient; make sure your representing agent pre-screens the sellers and stays on-top of negotiation communications.
0 votes Thank Flag Link Sat May 5, 2012
Janet: If you objective is to get a great investment house, I would not get bogged down with a short sale house that needs major repairs. And any minor repairs should be considered in your "low ball" offer. An experienced agent will find you and negotiate a great deal on a short sale house that won't need to have an issue with repair cost as an addendum

DAVID COOPER Investor with Buyers Agent License at Since 1917 Realty 702-499-7037
For the latest Las Vegas News follow us on FACEBOOK http://www.facebook.com/davidcooper
0 votes Thank Flag Link Sat May 5, 2012
It's not rare! Ask for a reduction in sales price; it's important to do your due diligence in the first 7 days (or hoe were many days you write in your contract); you inspect the property, get estimtes for everything you would like to renovate, and determine what the overal capital input justifies the purchase; if you feel the sales price needs adjustment, then simply ask for a reduction in sales price with your inspection response. In a short sale, the seller doesn't ally care what the sales price is as long as it's fair and justified. REMEMBER, submit your request with your fast due diligence period so you get the addendum and updated estimated HUD before the negotiator gets to it.

And again, it must be justified, supported with evidence, and fair.

Lender's may often require repairs to be made prior to close of escrow (often resulting from Appraisor comments) and banks rarely say no to those repairs.
0 votes Thank Flag Link Fri May 4, 2012
That is only successful on rare occasions. It doesn't hurt to ask but don't get your hopes up.
0 votes Thank Flag Link Fri May 4, 2012
Hello Janet,

Normally, the loss mitigator in the bank is looking to maximize their net, and minimize bank's loss...
I have yet to see the bank paying anyone to buy (with repair money).
Short sales are hot, and they afford a great discount, so this just does not happen to my knowledge.

However, if you will be buying with financing, you might want to look into 1) 203k programs - rehab programs 2) buy a Homepath or Homesteps programs properties - in Homepath, they have a rehab program available for buyers as well

Hope this helps,

Irina Karan
Beachfront Realty, Inc.
CDPE - Certified Distressed Property Expert
0 votes Thank Flag Link Thu May 3, 2012
I tend to look at most sales as as-is purchases... I tend to view and estimate repairs prior to making offers, and then make the offer accordingly. If you find something in the inspection that you did not expect you can always ask the seller to contribute, reduce the sales price, or to make the repairs. The response will depend on the seller; in short sales I'd pursue the price reduction route, as the seller doesn't have enough funds to continue to pay the mortgage let alone make home improvements.

Many bank-owned sellers will require the buyer to confirm that they a buying the house as-is with no warranties or repairs, and even then sometimes they will budge on reducing the price or making the repair if it's necessary for the loan or it is an obvious condition of the house that was overseen and would cause the fair market of the price to drop.

In the end, asking for repairs, contribution, or reduction in price is NEGOTIABLE.

--Mark Fleysher, 702-291-8186
0 votes Thank Flag Link Wed May 2, 2012
The seller is the owner of the house, not the bank. The bank only states the terms they will be willing to accept to do a short sale. You can ask them to forego even more money than they already have to make repairs, but the answer will probably be no.

You can ask the actual seller to make the repairs, but if he can't or won't make payments then probably he can't or won't make repairs. Many short sellers specify that the sales are "as-is." Read your contract, addendum, and counter offers to see if that is the case.

Good luck.
0 votes Thank Flag Link Wed May 2, 2012
The answer typically is no-
If the property requires repairs to make it financeable, you might want to go down the road of doing a rehab loan- fha 203k financing -
Paul May
Web Reference: http://www.mayteamlv.com
0 votes Thank Flag Link Wed May 2, 2012
Janet: I would hope you are getting a really great deal on a "short" sale, savings 1000's below comparable properties. That alone should be all the motivation to get the bank to say yes to your offer. If you are NOT saving lots of money, I would look for a property that doesn't need repairs.

DAVID COOPER Investor with Buyers Agent License at Since 1917 Realty 1-888-616-6226
Check us out on FACEBOOK http://www.facebook.com/davidcooper.lasvegas
0 votes Thank Flag Link Wed May 2, 2012
The bank is not going to pay any repair costs. They are losing money and would not be willing to pay for any repairs. Also the persons who have the mortgage are the sellers. The bank just holds the mortgage or d]Deed of Trust. Short Sales are as Is in most cases. There may be exceptions but i have not seen that in the ones I have completed.
Thank You
Suzie Marquardt
0 votes Thank Flag Link Wed May 2, 2012

Short sales are as-is purchases. The banks are very firm on not paying for any repairs on a short sale. Reason being, the bank does not own the property yet so they are not going to do repairs.

An example of an exception, the A/C units get stolen during the escrow process... often times the bank will reduce the price of the home in lieu of repairs....

Also, the bank will not pay a home warranty or any other small misc. fees.

I hope this helps..

Call me if you would like to further this conversation.

Dale Snyder
0 votes Thank Flag Link Wed May 2, 2012
You can ask, but you probably won't get it. Usually it's much more beneficial to ask for a decrease in the purchase price by way of addendum for items "discovered" by the inspection needing repairing.

Banks do not like to repair a home that really doesn't belong to them as, legally, it is still property of the seller. They will, however, reduce based on condition, but only if you provide evidence such as inspection reports with a contractor estimate. The more documentation you can provide, the more inclined the bank will agree to the reduction in price.

That's what I've always found from personal experience.

In need of a good agent? Please visit our site http://www.LasVegasRealEstateConnection.com

My direct number is 702-222-0815


James Bellile
iProperties International
0 votes Thank Flag Link Wed May 2, 2012
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