Posted by Rich-CA on December 02, 2007 at 21:35:03:
Very carefully. I had to purchase new cabinets (upper set) in a kitchen because although the cabinets looked good, a leak from the upstairs bathroom had rotted out the supports at the rear of the cabinets making them unsupportable in spite of their apparent good condition.
Seller contribution to major repair. - Posted by john
Posted by john on December 01, 2007 at 11:26:12:
I looked over a house today that I want to put in an offer on. While looking it over I noticed that the sill is all rotted. The house needs a lot of repair but mostly cosmetic stuff that I can do over time. The sellers are desperate. How can I get them to pay for it? Put in an offer subject to them fixing it first? Can they escrow funds to fix it at the closing or is there a legal issue with that? I have not had an estimate done but spoke extensively to someone who does that work and he estimates $38k to fix (of course he will work up a full estimate if it gets to that point). It’s too much for me to come up with a downpayment, closing costs and $38k more. I would rather go up on my price and have the seller fix it. It will easily appraise for my offer plus $38k and then some. My offer plus $38k in 66% of what the tax record has it appraised at.
Re: Seller contribution to major repair. - Posted by Kurt Schultz
Posted by Kurt Schultz on December 04, 2007 at 04:19:31:
Why not drop your offer by $40,000? If you are already in contract, this is the reason you should use your weasel clause.
Re: Seller contribution to major repair. - Posted by Rich-CA
Posted by Rich-CA on December 01, 2007 at 18:55:55:
You can ask them to fix it, but have not control over the quality of the repairs. You can have the funds escrowed, but I have found the escrow officers want a payee for those funds. Are you going to do the work yourself or will you use a contractor/property manager to handle things. You may also set up an LLC to handle the repairs and have the funds paid to the LLC.
Re: Seller contribution to major repair. - Posted by john
Posted by john on December 01, 2007 at 20:37:14:
A payee is no problem. I just want it fixed. I am not looking for a payout, too. Is it legit with a lender to get a repair kickback if it is really going to a real business who will repair the problem? I don’t want a dollar from it. I am getting a great deal but this is a $35,000 problem that I didn’t count on and don’t want to pay for.
Re: Seller contribution to major repair. - Posted by Rich-CA
Posted by Rich-CA on December 02, 2007 at 17:59:01:
I have had lenders object to any payout to me personally - it looks like you are inflating the price to get cash out - which is why I use a 3rd party such as a contractor or manager as the payee. I have had lenders ask about these, but in most cases the contract and the repair agreement addendum answer the objections. The escrow companies I have dealt with want all the money out of their hands with closing and are not likely to handle a repair escrow without additional cost.
It would be best if the seller did the repairs, but are you sure you can count on repairs that are not going to get you in trouble further down the line?
Re: Seller contribution to major repair. - Posted by john
Posted by john on December 02, 2007 at 19:10:03:
The payout would be to the contractor. I will talk to my mortgage broker some more. I would like the seller to fix but I don’t think they will. I am going to check very carfully with a contractor to see if there is a likelyhood of further repairs or hidden repairs that may need to be done.