Home Buying in 80203>Question Details

jacki_26, Home Buyer in Toledo, OH

if a home asking price is 72.9 and the home needs about 5,000 in repairs how much should the offer be?

Asked by jacki_26, Toledo, OH Mon Jan 13, 2014

would you still be able to borrow the full asking price even if you pay less and use that money towards repairs?

Help the community by answering this question:


It depends on how it is priced. If it has been priced lower to account for the $5000 in work needed, you may need to offer full price. Especially t that price range. You may be competing with other buyers who are willing to pay more. I don't know where the home is, but anything under under $100,000 which I believe you mean $72,900. The home may already have received an offer while you are waiting for answers. A good agent should be able to show you comparable's to help you understand the value of the home to see if the repairs have been already taken into account with the price. A FHA 203 K loan will allow you to borrow the money to do the repairs, the home has to be worth what you are offering as is, and has to be worth the amount you are borrowing when repaired. You can do paint, carpet, appliances, roof, almost anything you can think of as long as the appraiser shows the home will be worth the amount borrowed when the repairs are complete.
1 vote Thank Flag Link Mon Jan 13, 2014

In Denver, the smallest 2 bedroom, 1 bath home would have multiple offers and a bidding war at this price. Check with your Buyer's Agent to advise you in your market.

Robert McGuire ASR
Your Castle Real Estate
Direct - 303-669-1246
0 votes Thank Flag Link Sat Feb 1, 2014
The asking price is largely irrelevant in this discussion. The real question is, what is the current market value of the home? That is determined by analyzing the most recent Sold comps for homes of a similar size and construction in that neighborhood to establish a valuation.

If the home is priced $5,000 over current market value, your Realtor will likely recommend that you offer $5,000 less than the current list price, or that you require the seller to make the necessary repairs as part of the 'Inspection Resolution' process.

Lastly, there are loan programs that allow home buyers to borrow additional funds for remodeling a home after the purchase. Those programs have specific requirements and limitations. You should talk to your lender about those options.

Best of luck!
0 votes Thank Flag Link Thu Jan 23, 2014
As stated previously, you need to do a market analysis of the property. Your agent should be able to do this for you. You need to know the value of the home in it's present condition (if it is a FHA foreclosure, the list price IS the "as is" value) and also what the property will be worth once the repairs are completed.

You can not get money at the table, as it is considered an "incentive to buy" which is not allowed. You can however, roll in the costs to repair the property in a 203k loan program. With this program you can replace the flooring, paint, get new appliances, furnace, etc and the amount is rolled into your loan amount. It does require a licensed contractor or GC make the repairs; it is similar to a construction loan, where you have draws and a final inspection is required before you can move in.

If you would like to discuss this, please feel free to call, text or email me. 720-333-5363 or ColleenLMullins@yahoo.com

Colleen Mullins
A La Carte Real Estate Services
0 votes Thank Flag Link Mon Jan 13, 2014
As many real estate professionals below have mentioned, you should have help from an experienced buyers agent to help you navigate the process. The are several factors besides the cost of repairs that you will need to consider before making an offer. For example, what are the recent and historic sales comparables, current market activity, and more. An experienced real estate professional as well as a trustworthy contractor will be able to help you make a sound decision.
0 votes Thank Flag Link Mon Jan 13, 2014
There are a lot of variables that go in to making an offer on a home therefore there is no easy answer to your question. You should be represented by an experienced “Buyers Agent”, an agent that does a lot of transactions, is familiar with the area the property is in, is an experienced negotiator and has a good professional reputation among the local agents. If you don’t have a real estate professional representing your best interests hire an attorney when entering into any contractual transaction.

If you are in the Metro Denver CO area feel free to contact us any time with all of your real estate needs.
0 votes Thank Flag Link Mon Jan 13, 2014
Dear Jacki,
You desperately need an excellent "Buyers Agent" who can advise you on the market conditions, values, owner motivation and so on. These are the things you need to know in order to make an offer that has hope of being accepted by the owner.
0 votes Thank Flag Link Mon Jan 13, 2014
An FHA 203K loan would be your best bet if you are looking to purchase the home and make repairs and upgrades to the home with it all rolled into one loan. Otherwise no you cannot get a loan for the full asking price and get money back at closing to make the repairs.

I hope this helps, feel free to reach out to me with any questions.
0 votes Thank Flag Link Mon Jan 13, 2014
The key to your equation is: What is the market value? Granted, that is subjective. But an Asking Price and an estimate for repairs isn't enough information to determine an offer or eventual purchase price.
0 votes Thank Flag Link Mon Jan 13, 2014
That's a good question Jacki. Unfortunately it's impossible to tell just by looking at those numbers. You'd have to do a full market analysis to get the actual post-repairs value of the home. Just because they're asking 72.9 doesn't mean it's worth 72.9. It could be worth 60k or it could be worth 100k. You definitely need an expert working hard for you. Is that something you have?

Dave Umphress
Keller Williams Advantage Realty
Direct Line: 303-578-0741
0 votes Thank Flag Link Mon Jan 13, 2014
Upon appraisal and inspection of the home based off of what type of loan you are using yes it can be rolled into one where you can use the money incorporated into your loan for repairs. As far as the price you should offer, you need to have your agent pull up some comparable's in the area, generally starting with the neighborhood the home is located in and working your way out from there.
0 votes Thank Flag Link Mon Jan 13, 2014
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