Take pictures of the condition of the property, especially the problems. Send in those pictures with your next offer. Also, include your estimate (be sure to include a fudge factor for unknowns) of the repairs required and submit your offer asking for the repairs to be made as a contingency of settlement.
When the bank balks at doing repairs, then ask them for a repair credit equal to your estimate. If successful, you may get cash back at closing to either do repairs or pay off the credit cards. Instead of giving you cash at closing, the bank may just hold your funds in a maintenance escrow account. As repairs are completed, you draw against the escrow to pay your repair expenses.
Once you are in the house and have completed the repairs, you can explore a home equity loan against the equity in the after-repaired-value in your home to pay off your credit card debt.
I am looking for suggestions on what I might do following a recent rejection on an offer I made.
Property is 3BR/1.5BA split level. REO by out of state bank. Sitting a winter in Cleveland has caused significant water damage. Most of the dry wall in the lower section needs replacing. H2O, Furnace, C/A unit each look minimally 15-20 years old. My estimate to make it livable at least $15K. To make it nice (including redoing kitchen and full BA) $25K to $30K. Since we would plan on living in it for a few years, I would like to make it nice. My estimated current FMV of the property - ABSOLUTE MAX $65K. Bank has it listed for $99,900 (their out of their minds).
My offer:
$105K with $55K allowance for repairs and for us to restructure our debt, all financed by the bank that owns the prop. Our credit card debt of approx $25K has stood in the way of us getting any financing at all, conventional or otherwise. Given the very starong RE market in my area, broker said they are betting they will get high $80’s at a minimum. Comps in the area are $110 - $112K.
Our offer was rejected today. The broker said that the bank “does not do this sort of thing.”
So what now? Any suggestiosn would be greatly appreciated. You might say my wife and I are motivated buyers as we need to be in some place by end of June.