First Home Purchase - Possible Rehab needing thoughts
Hello all,
Background:
My wife and I were recently walking around one of our favorite neighborhoods and some of our friends gave us some info regarding a house on their street. It has been vacant for 1 year due to a older lady having to move out of it and live in a nursing home. We believe it will be a great fit for us and our family and would like to put a offer in on the property. We have not seen the inside of the house however I have looked it up on PVA and we have talked with the POA. It is 2,200 square feet, 2 full bath, 4 bedroom, no basement. It is currently a duplex with two kitchens. We believe it is 2 bedroom 1 bath on each apartment. The house was originally a single family home. 3 offers have already been made on the home 125,000 and two offers for 150,000 (both contractors) and they were all turned down. We are the first family to put in a offer and the seller has said they would like to sell it to a family. We would like this to be our primary residence and would plan on living there 5 plus years.
Additional Background:
The POA has said they are going to hold the house until they are positive their older family member will not move back in. She said it is highly unlikely that she will move back and that it may be around 6 months or so before they actually are ready to sell. We would like to lock in a written offer contingent upon the elderly family member not moving back and want to make sure we are considering everything we need to for the written offer. We have told the POA we would give 155,000 and she thought that was reasonable however the elderly woman is still making the decisions for now so she could not say "write it up".
Questions:
1. My first questions is I have never created a written offer and I cannot seem to find one on the forms/templates. So I would appreciate any direction on this regarding what should be included from a legal perspective. In addition, what does a written offer actually guarantee legally? Is there a better way to go about this?
2. We know our written offer needs to have contingencies based on the situation and I am considering the following: 1. it will be contingent that the elderly woman does not move back in. If she does the agreement will cancel. 2. It will be contingent upon an inspection 3. Anything else we should consider or have in place before the offer is signed??
3. We currently have 67,000 cash and are looking at the different types of loans we can do to rehab the property. I plan to go into deeper depth in another post regarding our rehab estimates (we believe $125,000 is needed because it is in bad shape and similar houses on the street are selling or around $300,000 plus) but I wanted to get thoughts on the best way to finance it. Should we get a one time construction/rehab loan and build it into the mortgage? Should we get a 155,000 loan and then open a separate loan for the rehab? Should we phase the rehab and just save or cash (would love for someone to convince my wife of this haha)? Other ways??
All input is appreciate as this is our first home purchase so we would like to turn over every stone so that we do not put our self in a bad position.
Regards,
Ryan