Freddie Mac asking for appraisal to back up counter offer

[Kirk Berryman]

I'm in need of some advice & opinions.

I purchase long term rentals.  I got a gem of a property under contract that should rent for $1500 a month on $110k purchase price. It is a condo on the north side of Chicago.  The inspection and attorney review period uncovered some unsavory items.  The property needs about 5k in unanticipated repairs based on the inspection, there is a special assesment of $165 that was not disclosed in the contract, the roof on the building needs to be replaced and the association does not currently have the funds to repair it properly hence the special assessment.

Long story short I don't want to walk away from this property because these are all issues that can be addressed so I countered with a lower price based on this new information.  This property is a foreclosure, and Freddie Mac responded that they will only continue to negotiate if I provide an appraisal.

I'm not sure I really want to pay out of pocket for an appraisal after I just paid for an inspection and an attorney which seem more appropriate to back up the issues uncovered.  However there is still not any guarantee that they will actually drop the price. To top it all off I talked to my lender and he can't even get an appraisal because we don't have a completed and agreed upon contract so I'd have to hire an independent appraisal, hope they drop their price, and then pay for a second appraisal through my lender when the time comes to complete financing.

Has anyone ever heard of this before? I'm not sure what to do.  I think I've got a great deal but I'm really torn on what to do.

[Account Closed]

If you got a great deal spend a few dollars for the appraisal, and it looks like they don't trust your counter because most investors will jack the repair cost to get a better deal and Freddie Mac has seen this many times and Freddie Mac not going to trust attorney words on repairs. Are you afraid appraisal will not match your counter?

Joe Gore