Profile picture for firedannj

Can I lease a home in order to due repairs after contract is signed?

I have a contract to purchase a REO being sold 'as is' using a USDA loan. The appraiser came back valuing the house well above the purchase price but included 2 very minor repairs (see photo) and need the power turned on in order to check the appliances.
Since the bank wont so repairs, and I don't have the right to do them, could I lease the house from the bank prior to purchase to turn on the power and do repairs?
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January 02 2012 - Longs
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Answers (9)

The power company should allow you to turn them on for a short period in your name. However, the bank will most likely not allow unauthorized repairs to the home prior to closing for insurance reasons.
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January 07 2012
Profile picture for P_Guthmiller
This is what I was talking about - the banks are crazy.  They will just do what they want without thinking.  Maybe the bank has a property manager that can come turn on the power for you and oversee the reapirs?
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January 04 2012
Profile picture for CrystalsSecondHome
My situation exactly.  I'm working on closing currenlyt, but my solution seems to be to get financing from a local bank and after closing, rent it while fixing it.
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January 04 2012
Your agent should have had the selling agent have the power and water on prior to your inspection.

Have the utilities turned on, and have the home reinspected, and, if necessary, offer to escrow enough cash to have the home professionally repaired in a reasonable period of time after closing.  When the home is repaired, you will receive the remains of the escrow.

Good luck
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January 03 2012
Profile picture for firedannj
The real killer is, the repairs needed according to the appraiser would take 20 minutes and $25 in materials. A piece of brick mold on a garage entry door and re-attach a small section of screen on a porch..  I can't believe something this minor would knock a house out of HUD requirements..
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January 02 2012
As others have already noted, it's unlikely the bank would agree to a lease prior to closing, but you can have your agent ask.  More importantly, I would advise you not to do so.  You sound fairly certain that you are buying this house, but, what if for any reason that you don't anticipate, the sale falls through?  Would you want to have invested money in making repairs to a house that is not yours?  A reminder:  you are in the process of buying the house, but the house is not yours until the day of the closing and until you are given the keys!  Be careful!
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January 02 2012
It is unlikely for the Lender to allow a rental for the home you are purchasing, especially since you are currently under contract to buy the home.  The only way the Lender may do a repair or allow a repair to be made is when the USDA loan is contingent upon making certain repairs.
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January 02 2012
The "could you" is really up to the bank and you. I seriously doubt that most banks would consider leasing an REO property, but your agent can certainly ask.  I would encourage you to really think about the "should you" as much as the could....putting money into a home you don't own is ALWAYS a risk.  If the repairs are nominal and you are comfortable with the risk, the could may outweigh the should.   Just know there is risk involved.
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January 02 2012
You should discuss this with your Realtor. It is a Catch 22 situation, and unfortunately there is not an easy solution since it is a bank owned property. Hopefully the bank rep will exercise a common sense approach that will be a win-win.
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January 02 2012
 
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