What are the pros and cons if I go with one vs the other? I also heard that using the words "credit" or "repair" in the addendum could signal a red flag to a lender.
I rather use credit, so that you don't have to wait for the repair to get done, and by using the credit, you can choose your own person to fix. Credit is pretty standard, at least in IL, so I don't think it'll be a red flag.
If you ask for repairs, I believe they have to be completed prior to closing, which could delay things.
However depending on the purchase price v the cost of the repairs, be aware that you can run into Fannie Mae restrictions-- I believe seller credits can't be equal to more than 6% of purchase price (or possibly 6% of loan, I'm not sure which)
Problem with repairs is the seller is going to take the cheapest rout possible, corners will be cut and quality of work compromised. I have seen this too many times.
I agree with @Thomas S. . I bought a house that I requested some work be done. The homeowner had the work done, however he halfa**ed it and some of it was still an issue (roof leak) and another fix is just a questionable eye sore. I honestly didn't want to deal with the work after moving in (we were in a rush) and knew I would probably get work that wouldn't be as nice as I wanted... however the roof leak I ended up having to fix it anyway!
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing