- Find a Real Estate Professional
- Realtors®
- Mortgage Lenders
- Home Improvement Pros
- Other Real Estate Services
- Review an Agent, Lender or Pro
- Marketing on Zillow
- Real Estate Agent Advertising
- Join the Professional Directory
- Popular
- Real Estate Market Reports
- More
Answers (7)

- Kimberly Gelardi, "Kim Gelardi"
- Contributions:41
Bill has the best advice - look into the 203k. It is time consumming but it gives you the most protection.

- Jo Shaner, "JoKnows"
- Contributions:12
Yes, the best answer is a FHA 203 loan. If you make repairs prior to closing and something goes wrong, you will be in the lurch. Even if you have a signed agreement stating reimbursement.
Been there, done that - a worker getting seriously hurt, the house being vandlized, faulty wiring causing the house to burn down and contractor disputes with mechanic's leans on a house that is not even yours. These guys are going to be coming to you - not to mention your binder insurance company.
With the 203 the loan gets a greenlight, it is budgeted in and work can be done after closing.
Been there, done that - a worker getting seriously hurt, the house being vandlized, faulty wiring causing the house to burn down and contractor disputes with mechanic's leans on a house that is not even yours. These guys are going to be coming to you - not to mention your binder insurance company.
With the 203 the loan gets a greenlight, it is budgeted in and work can be done after closing.

- David Cruickshank, "Ardain2008"
- Contributions:71
Bill has good advice. 203K is your best bet. They will lend the funds for repairs even if the home is deemed unihabitable.
Suggest you take a look at the FHA 203(K) program, it may work for you. You are even allowed to do some of the work yourself.

- Connie Wildasinn, "Connie Wildasin"
- Contributions:1178
Hi Dave,
Be very careful... for any buyer to do repairs on a sellers property is a risky proposition...you may not close... you may not get reimbursed... they may decide not to pay you... so many things could go wrong... seek the advise of an attorney and keep in mind you are considering great risk... this is not for the faint at heart and if this is your first investment property, you may want to not go forward with this property (which sound like a property that is a 'needs cash deal') and seek a deal around the corner that will not be as risky... keep your options open and keep looking regardless...
Be very careful... for any buyer to do repairs on a sellers property is a risky proposition...you may not close... you may not get reimbursed... they may decide not to pay you... so many things could go wrong... seek the advise of an attorney and keep in mind you are considering great risk... this is not for the faint at heart and if this is your first investment property, you may want to not go forward with this property (which sound like a property that is a 'needs cash deal') and seek a deal around the corner that will not be as risky... keep your options open and keep looking regardless...

- Josh Painter, "jpainter"
- Contributions:50
The addendum would have to be very specific as to the amount of repairs, otherwise the bank is cutting a "blank check" by agreeing to reimburse you in full if you can't get funding.
I had one instance where we did an escrow hold back. Basically the buyer had to deposit 1.5 times the estimate for the repairs into escrow, and once the work was done (after the loan funded) the contractor was reimbursed through the escrow account.
Another option may be to look into an FHA 203k loan. You can finance up to 35k in repairs, and the work can be done once the home closes.

- Valorie Stover, "QUALITY REALTOR"
- Contributions:170
Hi Dave,
This is done on bank owned properties and it can be a risk for you.
I tell my clients up front, it may come down to this. It depends on what the cost is for you. A major repair no way but a small one o.k.
If you are possitive that you will get the property than, yes, because you will have to do the repair anyway.
This is done on bank owned properties and it can be a risk for you.
I tell my clients up front, it may come down to this. It depends on what the cost is for you. A major repair no way but a small one o.k.
If you are possitive that you will get the property than, yes, because you will have to do the repair anyway.
Buying home that needs repairs before the bank will lend on the property.
We want to buy a home that has already been appraised at $440,000 after repairs.
However, the bank that owned the property went under and the property is being sold by investors. They have accepted our offer of $280,000. It is a 2600 sq. ft. house on 1 acre and seems like a great investment. The investors do not want to make any improvements, but the bank will not lend until repairs are made. Our agent has suggested an addendum allowing us to make repairs before escrow closes with a contingency that we will be reimbursed in full if we cannot get funding. We have already been preapproved and the bank says it will lend if repairs are made.
-Can you please tell me if this is an acceptable and safe legal arrangement.
Thanks -Dave
Stating a discriminatory preference in an advertisement for housing is illegal. If you think this content is discriminatory or otherwise inappropriate and feel it should be removed from Zillow, please let us know by completing the information above.
We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.