Close to Making First Offer; Misc. Questions

[Manuel A.]

Alright, so I found my first house I find interesting. Every wall needs to be redone (holes everywhere) and there a lot of other minor problems like that. Also, I think it's relevant to tell you this house is "REO/Bank Owned" and I plan on fix/flipping it. So can you all give me answers on my misc. questions for my first house offer?

1. I haven't yet priced out the repairs (I am going to in about 4 hours) but should I of have already submitted an offer with an inspection contingency? And does that "inspection contingency" mean I can go and inspect the house and reduce my offer price accordingly and/or back out? Is that what it's meant for?

2. When I write these contingencies, do I just write them in pen on the contract or should I have it typed out on separate a piece of paper? I have no clue...

3. I'm getting funded through an HML. When I talk to the bank or whoever I need to talk to, do I tell them I'll be paying cash? Or do I tell them, "I have a private lender giving me cash for this purchase?" Or what? What do I tell them so I don't scramble for words if they ask.

4. I'm going to be doing a, what others have told me, "financial contingency". can someone give me a good example of what this should look like? Like can someone give me their inspection and financial contingency terms so I may copy it. And I know this isn't legal advice and all the responsibility is on me, etc... The purpose I want to use this "financial contingency" for is to protect me EMD (get it back) if my HML doesn't come through for whatever reason...

5. This is really unrelated, but if I want a commercial property to be rented out, do I ask a Realtor to do it? How can I get it rented out? It's a small property big enough for a small restaurant if that's relevant... I know someone who wants to get it rented out and I'm trying to help (and I will get compensated)...

I may come back with more Q's but thanks for everyone's help! I just want this to go smooth! I'm nervous and I want to sound as competent as possible to everyone I come in contact with in this deal!

Thanks,
Manuel

[Jon Holdman]

1. Yes, you can do an inspection and then try to renegotiate. However, things like holes in walls are obvious and should already be factored into your offer. If the inspection finds something not obvious, you have a better chance of getting a price reduction.

2. The agent helping you write the offer will know where to put them. Inspection and financing are usually covered in the contract itself, so its just a matter of checking the right boxes and filling in the blanks.

3. Its a financed offer. Its not a cash offer. Include a pre-approval letter from the lender.

4. The financing contingency covers you if the lender doesn't come through. It will say something to the effect that your offer is contingent on your ability to get financing at a certain rate and term. There's a deadline. If your lender denies your loan, you'll submit that info to the seller. If you miss the deadline, however, you can't use this contingency to get your EM back.