post structural inspection price negotiations
We are in the process of buying a home. Our structural engineer discovered problems that were much more extensive than what we thought existed. We have our first contractor's estimate of the costs of repair and are waiting for the second to come in, and i'm trying to figure out how to do the next round of negotiations with the owners.
Q What are the different ways that buyers and sellers can arrange to handle the repair expenses? We would like for the repair$ to come out of the home loan since we would have trouble coming up with thousands of dollars in the next month or so :)
if you want more details, read on :)
The house is a late 70s contemporary, largely un-updated, in a predominantly colonial neighborhood.
it has been in foreclosure twice in its lifetime, and was purchased in forclosure two years ago by the current owners. I think the bank did a new roof, new paint and new carpet before they bought it. The current owners have started a basement remodel, (lighting, drywall ceiling and walls and internal french drain), basement floors are still concrete. These improvements unfortunately will mostly be undone in the structural work that needs to be done.
We like it mainly because of the school district and location but would not be heartbroken if the purchase doesn't work out.
I think our bargaining position is strong because we do not have a lot of pressure to purchase right now, although we would like to find a home. The current owners have ended their relationship and may be under some financial pressure to sell. The house has 4 areas which require major structural repair. 3 of them will cost around 17K, the 4th area cost is undetermined because we have to cut into drywall to see the extent of the problem. One of the repairs will reduce a 3 bay garage to a 2 bay garage.
They purchased it in foreclosure two years ago for 140K. Right now, we have offered them what I feel is a generous 143K. I'm sure they don't feel that is a generous number since they listed their home in December for 164,900 Based on their deed-of-trust, they need approximately 123K to pay their bank and their realtor.
We're going to put our position in a letter for their realtor to give to them, just to make sure that the realtor communicates everything -
I'm just having trouble figuring out what to say in our next communication and how to structure it so that the repair $ comes out of the loan.
Thanks for your thoughts!