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Old 12-15-2010, 04:34 PM
 
20 posts, read 55,185 times
Reputation: 14

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I'm in the process of buying a short sale property with a FHA loan. It will need a few fixing but not exactly sure if they're require just yet to comply with FHA guidelines. Here's what I see that needs fixing:

1. Replace missing roof tiles (they're right at the eaves so it's not leaking into the inside)
2. Evidence of rodents from droppings
3. Wooden fence shared with neighbor is leaning in some areas
4. Minor water leaks from sink and toilet in master bedroom (nothing big enough to cause any prior damage)

We're still waiting on the appraisal and see what they flag, if any. I strongly feel that the sellers are going to refuse to pay to fix any of these problems. I haven't done any estimates but I'm thinking it shouldn't be that much so I don't really have a problem paying to get them fixed. The problem I do have is fixing a house that I don't own yet and possibly not even close on.

So if they happen to refuse, what are my options other than walking? I've read of buyers being able to put money into an escrow account for repairs after closing but also read that they won't allow it for certain repairs. I really hate to walk away because I'll be out almost $800 on this deal and can't think of spending any more time in a hotel (6 months already). And yes, I am working with an agent but he said to wait until the appraisal and then we'll think of a strategy.
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Old 12-15-2010, 08:28 PM
Status: "Now working for a true portfolio lender" (set 9 days ago)
 
Location: MID ATLANTIC
3,957 posts, read 8,530,900 times
Reputation: 2965
Wait and see what not only the appraisal requires, but what the lender's Direct Endorsement Underwriter requires. They should be only requiring what is a safety issue or a code issue. Everything you mentioned, with the exception of #4, fit in those categories. But lenders are afraid of their shadow and may require it any way.

Only weather related escrows are allowed, so you may get lucky with the fence and the roof. The quick fix for the fence is to take it down (as long as there is no value assigned to the fence). And if the roof isn't obvious, it may not get picked up. Rodents are a safety hazard, if the droppings are obvious, count on that condition. What does your contract say about pest control.....does it only address termites? I think most of the appraisers will tell you they have their required checklist, but they aren't going to play home inspector. They have a responsibility to note everything they see, but it's up to the underwriter to specify the repair conditions.
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Old 12-15-2010, 08:38 PM
 
Location: Salem, OR
10,929 posts, read 18,576,045 times
Reputation: 6855
You'll want to to a hold back account. This allows money to be set aside after close of escrow and you'd have 90 days from the time you own the house to get the repairs done.
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Old 12-16-2010, 08:34 AM
 
Location: South Metro Denver for 25 years
8,633 posts, read 19,074,187 times
Reputation: 4341
Whatever repairs FHA will require, it will be completed and reinspected prior to closing.
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Old 12-16-2010, 10:54 AM
 
70 posts, read 170,556 times
Reputation: 50
My first house had some FHA-required repairs needed. The seller could not afford to fix them, so I did the repairs myself, prior to closing. If you really want the house, fix the issues yourself.
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Old 12-16-2010, 12:52 PM
 
Location: OK
2,512 posts, read 4,155,880 times
Reputation: 1479
FHA only requires repairs if the issues pose a health or safety hazard. Of course, the lender may have its own guidelines. It is their money!
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Old 12-16-2010, 06:30 PM
 
Location: Columbia, SC
7,012 posts, read 11,009,215 times
Reputation: 3538
Of what you mentioned probably the roof and possibly the leak depending on what it is would come up. It's not an actual inspection like a home inspector would do. The appraiser does an arm's length visual inspection and if he sees an issue he notes it. They are looking for holes in the wall or floor, missing flooring, bad roof, etc that visible safety issues or a necessities that are missing such as no range, hvac, lighting, etc.
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Old 12-16-2010, 07:10 PM
 
Location: Athens
470 posts, read 839,289 times
Reputation: 252
If there are FHA required repairs to be made, or even if you want some things done, you can look into a 203K streamlined loan. Any good lender with FHA experience should be able to easily accommodate you with one. The loan amount is based upon the value of the property after work would be completed.
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Old 12-16-2010, 07:23 PM
 
Location: Dallas, TX
88 posts, read 140,469 times
Reputation: 30
Short sales you wont' be able get repaired. Your buyers agent should be providing you that info. could be wasting money on inspection and appraisal.

FYI - appraised value of home has nothing to do with inspection

I move onto another property.
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Old 12-16-2010, 11:42 PM
 
Location: Columbia, SC
7,012 posts, read 11,009,215 times
Reputation: 3538
Quote:
Originally Posted by Lynn411 View Post
Short sales you wont' be able get repaired. Your buyers agent should be providing you that info. could be wasting money on inspection and appraisal.

FYI - appraised value of home has nothing to do with inspection

I move onto another property.
I don't agree with this. If it's just patching shingles or something and the house is a good deal just let the buyer do it after 3rd party approval if it happens. It would be worth it for a good deal.

I do agree the buyer agent should be addressing these issues.
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