How to negotiate purchase price to include reno/repair cost?

[Hugh Cross]

Can someone explain how deals are done to include repair costs in the mortgage loan amount? I recently saw that someone purchased a $140k property and got a $200k mortgage. If it appraises for $200k then do you just work out the repair costs with the seller and pay them the difference from the loan amount?

I’m just a little confused about what the bank thinks of this. Or does the seller get the full amount and then give you the $60k for repairs through a separate contract?

Thanks guys!