Repairs could be more than you expected either because you underestimated the cost of rehabilitating the house, your inspector found hidden damage, or both. If I were the banks asset manager, I would be more negotiable if the problem was with new discoveries than if it was just the buyers early optimistic underestimate of project costs turning pessimistic.
The amount of negotiations a bank is willing to do is different depending on many factors: bank policies (which when you're negotiating many deals a realtor begins to know how negotiable specific banks are), and the type of negotiating item that you're referring to. For example, if it's that the appliances are missing then they're more likely to give you credit. If it's that the sprinkler system doesn't work....I guess it's a toss up. It never hurts to ask. The difficulty on many REO transactions is that they sometimes tie a penalty to missing your COE (close of escrow) date and these negotiations can delay things. SO ASK, but do it as quickly as possible, It's as simple as submitting a 'request for repairs' addendum, and be ready to decide what you'll do it they agree, or disagree, to giving you the credit.
While most banks have buyers sign a long document that amounts to an "as-is" addendum, this is intended to protect the lender AFTER THE CLOSE of escrow in the event that new issues arise or unforeseen liens or balances due appear. If a buyer discovers new problems DURING escrow (through a home inspection) and they're still within their inspection contingency period (and watch carefully how banks handle inspection contingencies), it may be possible to go back and request additional credits. There are standard real estate forms issued by the California Association of REALTORSÂ® designed for requesting a credit.
Your REALTORÂ® should be able to recommend a strategy for requesting a credit for additional work that needs to be done on the REO property you're in contract on--one that's specific to YOUR situation. The information I've provided here has been intentionally vague and isn't intended as a course of action for you, only a real estate professional who is aware of the details of your situation can make more specific recommendations.
Rob McQuade, ABR, REALTORÂ®
Fortunately, for you, your contract contains an inspection period, during which you have the right to do a home inspection, among other inspections, and you may cancel the contract if you are dissatisfied. Bear in mind that some banks use southern California escrow companies, so when you cancel the transaction, they have 30 days to return your deposit. Many of them take that long to process it.