Purchase Price / Rehab Costs Question

Purchase Price / Rehab Costs Question

When you're making an offer, is it better to

1) have the purchase price include the estimated repair costs, and then have a seller concession for the repair costs, or

2) just have the purchase price be for the end amount you'll pay?

I like the idea of Option 1, because that looks better to the buyer, they're going to be aware of the need for repairs, etc. I think it would also help to eventually bring up property valuations in the area, rather than drag them down.

The problem I see with the first option is that it might be difficult to get an appraisal to come in high enough since the repairs aren't done yet. I guess with conventional financing that could cause some issues.

Anyway, submitting this loan today, will either be a HML (then refi) or outside chance of another FHA 203k Streamlined loan. Wondering what would be the best way to do it.