Best Way To Write-Up Offer

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Need advice on the best way to structure an offer for a 1st time home buyer with a 545 FICO. Has been approved for $100,000 with 5% down. 5% can be 100% gift from owner or others. Found foreclosure for $63,000 with approx. $6,000 in cosmetic fixups needed. Comps in area (after cosmetics are done) would put the value between $95,000 - $105,000. Want to pull money out of house at, or right after, close to pay off all other bills and do fixups. (1) Is it best (or even possible) to make offer to bank for $80,000, asking for $17,000 back at closing, or (2) make offer to purchase based on full asking price plus the needed 5% down, with the 5% being gifted back at the closing table and then get a refi immediately after close (so, before loan is seasoned) based upon what home will be worth after fixups? If neither of these makes sense, how can this be done? Need to find out quick! Thanks for your help!


  • roberth17th January, 2007

    I used to do business in Roundrock many yrs ago.
    I work with investors and take the time to show my investor team members the ropes for commercial investing. You will be able to find out many different subject items on this site. Enjoy

    Good Luck,

  • lassitermarketing17th January, 2007

    You can write a repair escrow into the contract.

  • TheCloser18th January, 2007

    As a mortgage professional I suggest you talk with your lender about this one. Most companies will allow up to 3% cash back at closing for investment properties.

    Depending on what is wrong with the property the lender may not want to lend you the funds if there is $30k in repairs required. Banks are getting tough on cash back, and receiving cash back after closing under the table (Not on the HUD statement) could easily be viewed as mortgage fraud. So be careful.

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