BiggerPockets

I noticed a house the I was interested in submitting an offer dropped form $234,000 to $199,000 in one month. Comparable fixed up homes in the area go for $430k. So I thought I could flip this to another investor by asking the bank for $150k, and double closing for $180k. But, the home has major repairs, and I just found out that the home has violations on it, whick the bank expects the seller to pay. I thought the bank had to pay sine they now "own" the property? No wonder all the deals on this house fell through. I think I should pass since I don't know how to fix this or even have the money to pay for these violations.

thanks for replying. yes, i mean housing code violations. i will check the city website to see exactly what violations are on the property. this house needs major work, there is plumbing and minor structural issues ( foundation is good). I think they are motivated to move this property becaues they dropped there listing price by $40,000 in less than one month, and they have had numerous offers, which all fell through bcause of the code violations. I still trying to learn the ropes and I see reos are not as easy as the gurus say, you have to know about how the banks handle reos and sell it to a buyer.

I have a buyer lined up, but I think hell balk if the house has major violations.

Originally posted by Jon

In my experience, and this is after about 30 offers on REOs, banks rarely accept more than a small discount off their current listing price. Getting an offer of $150K accepted vs a listing price of $199K would be unusual, though not impossible.

While that may be true in many cases and in many areas, in this case, you are dealing with a property that has most likley fell out of escrow at least once and has been on the MLS for some time which allows much more bargaining room for the investor and the bank will be much more apt to accept that offer, perhaps even lower in my opinion.

WHere are you at on your DD on this with the city code officials?
What city is it in?

Any news? Did you get the home?
Where is it?

A lien is way different from a housing code violation. I have never heard of a bank having to make repairs to bring it up to a certain standard.

Normally the county "may" require an inspection upon sale and then the buyer has to sign a waiver that the saw those violations to the code - but in a decade of doing this I have never heard or seen a bank have to make any repairs...I have seem them make some to try and sell it though....