This question concerns property located in Texas.
I recently had an offer accepted on a foreclosed property. I asked that the seller pay for some of my closing costs. They agreed if I agreed to use their bank for my FHA financing.
The FHA appraiser went out to the property and came back with a list of 15 small repairs they would require before my loan could be approved. I offered to take care of most of the repairs and asked that the seller take care of the rest. The seller then sent an REO contractor out to the property to give them a bid for the repairs that I had asked them to make. The contractor basically went through the whole property from top to bottom and came up with a bid for well more than the FHA required repairs.
The listing agent prepared an amendment to the contract that stated that the seller was going to pay for all of the repairs on the bid. This baffles me because I did not ask them to make all of these repairs, only a few to get my loan approved. I signed off on the amendment thinking that this was a mistake and that surely the seller would realize this. I never heard anything more about it from the seller.
Now all of the repairs have been completed, new carpet, new tile, fresh paint inside and out, a new stove, new lighting fixtures, etc. This seems too good to be true. Why would they spend all of this additional money if they were not asked nor required to do so? All I can think of is that the asset management company for the bank is in on some scheme with the REO contractor and they are "throwing them a bone".
I'm worried that something fishy is going on. Most banks on foreclosed properties will make little to no repairs. The sales price has not been raised and my seller paid closing costs remain at the original agreed upon amount. The seller is obviously going to lose money on this deal. Someone has got to be getting screwed and I don't want it to end up being me. My realtor said he has never seen anything like this. Has anyone had a similar situation to mine? Should I be worried?