We sold our house in Colorado and found a bank owned, foreclosed home here in Oregon that is priced above comparable houses in the area. We made a low ball cash offer and we think the bank will reject our bid out of hand or may come back with a figure slightly below the asking price. We found a lot of info from the county website today that shows some irregularities with remodeling permits and disparity with the number of bedrooms between the legal and the listed description. I was an electrician in another life and found many, many code violations in the house and we're not sure it complies to code with regard to insulation.

We should find out tomorrow what the bank will offer but if these problems aren't rectified, this house could cost us a lot of money to bring it up to code and that could price the house above what it is worth. We can meet their advertised price in cash but aside from the land, I have some isgivings about the house. I want to back out of the deal within the 10 day period and it is my right under the contract. Our agent told the bank's agent about the code violations and number of legal bedrooms but she doesn't think that will influence the bank in any way.

My first reaction is to say, "Caveat Emptor" to my wife about 100 times an hour. Anyone with expereince with this kind of deal? Advice?

My opinion: RUN!

Tell the bank they can "play nice", or they can play rough...and your idea of playing rough is to bring the code violations to the attention of the local inspectors (a little "gift" to the inspectors helps here)......the bank will take the cheaper way out ...(make thier choice they can sell low-ball and let you bring it up to code, or they can foot the bill for bringing it up themselves)