Investor · Leesburg, GA · Member since 2016 · 105 posts · 23 votes
Need help. I'm in a contract to buy a property. It is at a good price now, but I had a inspection and there are some issues. We have a busted pipe, no outlets working in kitchen, black mold in wash room, espestice siding, and other wiring issues. Can I negotiate for a GREAT price with the bank? If so how do I do it?
No. Banks don't generally negotiate on REOs. They don't care about the condition, just mitigating their losses.
What you need to decide is if the price you offered still works for you and the work that needs to be done. If it doesn't, drop the deal.
Mold in the wash room isn't a big deal. You have to deal with the excessive moisture issue (poor ventilation, chronic leaking).
Outlets not working in the kitchen is also not a big deal as long it's not a sign of major wiring problems (old wiring, rodent damage, fire damage, etc.).
A single busted pipe is also not a big issue assuming it's the only busted pipe and not a sign of other possible leaks due to poor winterizing. Most REOs I go into usually have most of the copper missing.
Asbestos siding can be covered with cheap vinyl siding, but expensive to remove. Where you have to be careful is that some insurance companies won't cover the house with asbestos siding. You don't want to get to the closing to find out they have dropped your coverage.
Investor · Leesburg, GA · Member since 2016 · 105 posts · 23 votes
9y
@Christopher Phillips thanks for the answer. I know all these things are minor, but wanted to know if I had tools for negotiations, because they can sound big and dangerous. The numbers still work and believe I can get COCROI of about 14%. I have never brought an REO and wanted to know if I had some leverage. Thanks again. I will just keep the report for myself and give it to my contractors. I guess I could have save that extra expense. I should have check on BP before I got the inspection.
Investor · Brownville, ME · Member since 2017 · 83 posts · 35 votes
9y
You did the right thing getting the inspection before you closed. What if you'd found a major issue, like a sinking foundation with a 40k price tag to repair?
It's good to have an inspection. You want to know as much as possible going into it and contractors usually don't test anything during walk throughs. So, that's the time to see what works and what doesn't and back out if something looks catastrophic.