First Time Buyer

[T H]

Hi everyone. I've been reading some of the posts and there are quite a few people here who have some excellent advice.

Here's my situation. I saw a 1980 REO condo that I liked. My parents gave me their approval, EXCEPT it needs some work. It looks like the previous owner had good intentions with upgrading this condo. Nice cabinets and light fixtures and floors and tile flooring and fairly new matching appliances. HOWEVER One side of the kitchen doesn't have cabinets (so I'm going to have to find the match), the floors in the bedroom needs to be finished (it looks like the former owner was beginning to put hardwood floors in it) I'm thinking of just putting carpet in the bedroom since it's not that big, the bathtub needs to be refinished, the balcony needs vertical blinds (or curtains), and it looks like the entry door needs to be replaced (or fixed where the knob and lock is, it's a knob with a plate where the top lock was). The doors need to be painted, since it looks like the owner started to paint the doors. There's a recessed light fixture that needs a cover. Oh yeah and the condo is BRIGHT YELLOW paint throughout, so definately needs to be repainted. The area is in a good area and will be easily rentable, once I move back home. I plan to live in it until I finish graduate school and rent it out. The HOA, mortgage and taxes are sooo much cheaper than renting in this area. In spite of a lot of REOs and foreclosures in the area these condos are being snatched up quickly.

The listing price is for $46K, I offered $44K on Saturday and it was accepted yesterday. Due to my credit and having a fixed income, my interest rate isn't the greatest, 7.62%. I know, I know! So my realtor is going to refer me to a home inspector because they want to close by March 10th. The lender told me that there wouldn't be a prepayment penalty, but as I read though the documents, it says there "may" be a prepayment penalty.

It seems like, as the buyer, I'm paying for a lot since it is an "AS IS" condition. CA law requires them to brace the hot water heater and install smoke detectors by the seller. After the home inspection and if I decide to go forth with the repairs, or whatever, would I be able to ask the seller to pay for some things? Like an allowance for the bedroom floors? Or no, since it's an REO? What questions should I ask the home inspector?

This is my very first time purchasing a house, so everything is kind of overwhelming and exciting and scary. I wanted to know if I'm doing the right thing. I want a piece of property instead of renting.

Thanks
T