Buying a distressed property is multi-factorial (provided I understood you correctly and this property is still a foreclosure), more often than not there is no negotiation room for making repairs or even seller given credits because the lack of equity in the home. Banks often respond to offers based on an equation as they are looking to get "X%" of what is owed by a certain date and that number may change after another date in their pre-determined timeline passes as they may be under the gun to get it off their books during a particular fiscal year. Also, in many cases a traditional loan product (trying to go FHA or conventional) may not be applicable as depending on the repairs that are needed, as minor as some may seem, lenders are becoming increasingly hesitant to lend on anything that is not in near perfect condition. I largely work with clients interested in buying distressed properties as well as list them, and I run into this challenge daily. With that being said, a conventional renovation loan may be necessary to obtain (and are hard to find) which would be based on an offer price (base loan amount) plus repairs (which would be a separate loan) . Once the seller is educated about the approach that has to be taken for you to purchase the property, it less insulting and more informative. This is a complex subject and I am trying to simplify, if you would like to learn more so you can put in an offer or even how to obtain such financing if it is necessary, feel free to contact me! - Wed Sep 9 2009, 13:18
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