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Old 05-13-2010, 12:59 PM
 
Location: Bethel Park, PA
142 posts, read 197,645 times
Reputation: 139
Default After the appraisal. What to do?

Quick question:

The FHA appraisal came back with a few items to fix:

-- frayed electrical cable that goes into house
-- uninspected electrical box
-- peeling/missing paint on a few minor exterior spots
-- non fire-rated door between garage and basement

So, the seller said he would fix the electrical issues only. Is this even allowed? I don't mind fixing the paint, and the door is about $100 pre-hung and I can put it in myself. But I don't own the house, so is this a bit fishy at all? I don't expect anything to fall through, but what if it does? I'd be left fixing a house that's not mine.

What do I do? My realtor seems to think that they are serious and would walk away if I refuse to fix the items they won't.

Please advise!
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Old 05-13-2010, 03:00 PM
 
Location: Plano, Texas
1,672 posts, read 4,272,313 times
Reputation: 640
That is amazing they would walk away from sale over doing a little painting and hanging a door. If you really want the house, and are willing to pay to fix, than do it. I find it hard to believe they would walk away. Each day they have this house they are paying another day of interest, more property taxes, more home owners insurance. Those things will cost a lot more than a $100 door and a little paint.

Additionally, if they dont sell to you and put back on market they could be facing the same issue on the next loan.
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Old 05-13-2010, 03:47 PM
 
10,022 posts, read 10,778,467 times
Reputation: 8974
Quote:
Originally Posted by JoshM25 View Post
Quick question:

The FHA appraisal came back with a few items to fix:

-- frayed electrical cable that goes into house
-- uninspected electrical box
-- peeling/missing paint on a few minor exterior spots
-- non fire-rated door between garage and basement

So, the seller said he would fix the electrical issues only. Is this even allowed? I don't mind fixing the paint, and the door is about $100 pre-hung and I can put it in myself. But I don't own the house, so is this a bit fishy at all? I don't expect anything to fall through, but what if it does? I'd be left fixing a house that's not mine.

What do I do? My realtor seems to think that they are serious and would walk away if I refuse to fix the items they won't.

Please advise!
FHA can refuse to fund your loan over PEELING PAINT? Wow, just wow. The other stuff seems like basic safety related stuff but peeling paint?
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Old 05-13-2010, 04:12 PM
 
Location: Niceville, FL
4,475 posts, read 8,090,496 times
Reputation: 3007
If the house is pre-1978 and lead paint might be present, it's easy to see where the peeling paint concern comes from.
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Old 05-13-2010, 04:55 PM
 
10,022 posts, read 10,778,467 times
Reputation: 8974
Quote:
Originally Posted by beachmouse View Post
If the house is pre-1978 and lead paint might be present, it's easy to see where the peeling paint concern comes from.
It's outside.
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Old 05-14-2010, 06:35 AM
 
Location: OK
2,489 posts, read 4,002,720 times
Reputation: 1462
Quote:
Originally Posted by Momma_bear View Post
It's outside.
Doesn't matter. It can contaminate the soil.

Josh, the seller would be doing all the fixing. If you don't own the house, are you the buyer? I guess I am confused.
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Old 05-14-2010, 09:25 AM
 
70 posts, read 162,488 times
Reputation: 49
Many years ago, we bought a cape with FHA financing. The appraisal came back with a problem - the upstairs was all open - no closets or dividing walls between the two bedroom "spaces". As such, they only considered the house a "one bedroom house". The owner had no $$ to hire a contractor for this, nor had the skills to do it himself.

With some family member help (and with the owner's OK), we framed, wired, drywalled, installed doors and painted in one weekend. It cost me about $500-600 at the time, and yes I could have lost it if the deal fell thru.

It was a risk worth taking for me, and it resulted in the FHA mortgage moving forward.
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Old 05-14-2010, 05:27 PM
 
29,990 posts, read 19,619,362 times
Reputation: 12340
FHA appraisal requirements must be fixed and the house re-appraised for verification that the required conditions have been met prior to FHA approving the loan. If the seller wants to sell the house FHA, he/she must comply. A seller cannot pick & choose what repairs they will do as they might with a Buyer obtaining a non-government underwritten traditional mortgage. The sellers' agent needs to explain to the seller that it is not the buyer walking but FHA walking if the repairs are not dne. No finacing = no sale.

Under FHA rules the buyer cannot do or pay for the required repairs.
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Old 05-15-2010, 01:07 AM
 
19 posts, read 57,693 times
Reputation: 16
Quote:
Originally Posted by Momma_bear View Post
FHA can refuse to fund your loan over PEELING PAINT? Wow, just wow. The other stuff seems like basic safety related stuff but peeling paint?
Likely because it's exterior paint...exterior paint's purpose is to protect the structure, usually wood. Why would the gov't back a loan for a structure they don't consider maintained & in sound condition? FHA is insuring the lender, not the borrower. The slightest bit of missing paint, if left ignored long enough, will likely increse in size & cause damage due to exposure to elements.
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Old 05-15-2010, 01:19 AM
 
Location: Huntington, NY
7,589 posts, read 10,132,904 times
Reputation: 3354
Quote:
Originally Posted by sunnydays077 View Post
Likely because it's exterior paint...exterior paint's purpose is to protect the structure, usually wood. Why would the gov't back a loan for a structure they don't consider maintained & in sound condition? FHA is insuring the lender, not the borrower. The slightest bit of missing paint, if left ignored long enough, will likely increse in size & cause damage due to exposure to elements.
Had just that happen with a recent sale involving FHA financing - some peeling paint on one side of mostly stone house. Because weather was too cold to properly paint, some $$ was put into escrow at closing to pay for the job after closing. A couple of estimates and the lender asked for 150% of the estimate in escrow. Seller didn't like it, but really had no choice... they needed to sell.
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