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Old 07-21-2016, 06:06 PM
 
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I just bought my first place a few months ago and it was a roller coaster of emotions for a couple of months. Our seller refused any repairs and ended up crediting us about $500 for some minor repairs that the inspector said we should do immediately. But as others said already, appraisal has nothing to do with repairs. If the appraiser says your home is worth like 20% less then your offer then the lender may refuse to finance. But from what I've heard most appraisals conveniently end up with the same amount as your offer...mine did down to the penny even though I ended up paying about $10k over original asking price.

But until everything is signed either party can still pull out depending on how far along you are.
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Old 07-21-2016, 06:27 PM
 
26,589 posts, read 52,257,058 times
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I sell as-is... take it or leave it.

The market is that good here that multiple offers are the norm with at least a third going all cash.

Contingent upon financing is a buyer issue.

I have made a dollar allowance on occasion... had some windows I was planning or replacing and credited the seller $1500... they were thrilled... it was a buyer's market.

Repairs are interesting... another home also had issues with windows... the buyer made a big deal about it and I wanted to close so I had a glass company come out and got everything ship shape... the buyer was horrified... because they planned all along to replace all the windows with higher end Anderson... can't win for losing.

Buying as-is has forced me to leave double the termite report in escrow for 90 days while the work was getting done... it was an estate sale and no one in the estate was going to put up money for repairs.
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Old 07-21-2016, 10:19 PM
 
2 posts, read 3,475 times
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Thank you for the replies.

I am aware that I cannot force the seller to make repairs. Yes, Iíve had the inspection and heís refusing all repairsósuch is his right. Iím still waiting for the results of the Appraisal, which is more important for financing. This seller doesnít want to sell, he is having Sellerís Regret and wants to sell for more money. Yet, he has a legal obligation to sell to me with no legal way for him to break the contract at this time. So long as my financing goes through by the deadline, if he fails to sell as agreed I could and would sue for specific performance if necessary and would certainly win. Well thatís the background; Iím not here for legal advice though so please donít go off-topic giving itóIím here only for financing advice.

Now, IF the Appraisal triggers the loan company to require repairs, the Seller would refuse any repair even if it costs $5 and I paid, in hopes of forcing my financing to fall through, and if my financing fell through then he could and would legally break the contract.

SoÖ and this is what the original post was aboutÖ if the Appraisal ends up requiring a repair, then are there things that I could propose to my loan company as an Alternate to fixing whatever. I like the idea of proposing to put the money into escrow, or pursing a 203k loan perhaps. Iím looking for additional creative out-of-the-box ideas. Iím hoping that there are no problems with the Appraisal, but just in case there are, Iíd like to fire off some great alternatives to repairing right away! Hope for the best and prepare for the worst!
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Old 07-22-2016, 12:28 AM
 
4,787 posts, read 9,292,750 times
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There are no great alternatives to repairing right away.

Conventional loans hate repair escrows. The investors who buy conventional loans want them clean, that is they want " as is" appraisals and no escrows or other requirements. If a lender would permit an escrow they often want 1.5 times the repair amount to be put into escrow- i.e, If your repairs are estimated to be
$ 5,000- they may want $ 7500 from you to go into escrow.

A 203K loan is not a conventional loan. It's an FHA loan which is going to require you to have pricey FHA mortgage insurance for the life of the loan. A conventional appraisal cannot be used for an FHA loan, so you would need an FHA appraisal, plus meeting other 203K requirements depending on whether it was an FHA streamline 203K or regular FHA 203K. All this FHA stuff will take lots of extra time, so there goes your contract time line.

Right now, just keep your fingers crossed that the conventional appraisal is done " as is" and you can get to close soon and on time.
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Old 07-22-2016, 06:32 AM
 
Location: Denver CO
21,156 posts, read 11,761,610 times
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What kind of condition is the house in? What kind of repairs did you request after the inspection that they refused to do?

A lender can ask for repairs, but I think it's pretty unusual on a conventional loan, esp. if the house is in reasonably good shape.
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Old 07-22-2016, 02:32 PM
 
26,589 posts, read 52,257,058 times
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I was the buyer in escrow where the sellers decided not to sell... I had paid for termite, home and chimney inspections.

About a week prior to closing the seller said he and the wife are separating so they are not moving and therefore not selling.

Went to my attorney and spent $800 in fees... the upshot was my lawyer asked me if I still wanted the place if the price was 20k more than the 130k I was in contract... I said no.

That was 20 years ago and the place looks abandoned... a broken down old man lives there that no one hardly sees... he went on disability and the word is he never recovered from the divorce...

This is my one and only experience with a seller that refused to sign.
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Old 07-22-2016, 09:52 PM
 
Location: Phoenix, AZ area
3,168 posts, read 2,931,655 times
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No court will force a seller to sell. The breach of contract is for damages, inspection and appraisal costs as well as misc things for hotel stays, food, storage costs but only if you have them. The courts will only award you in order to make you whole not so you can screw a seller who backs out of a deal.
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Old 07-22-2016, 10:54 PM
 
Location: Georgia
4,562 posts, read 4,090,588 times
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Quote:
Originally Posted by 399083453 View Post
If the lender requires certain repairs, and the repairs are refused, the deal falls through because you are unable to obtain financing. So its your fault.

You can still pay cash for it and the deal will go through.

My guess.....If you sue... and you can.... you will loose. And the judge could award the seller lawyer fees as well. So you will loose your legal fees, his legal fees and possibly punitive damages due to the house not being able to sell while this lawsuit was going on.
Not quite. Most contracts these days have a "financing contingency" where the buyer has to obtain a commitment for financing by a certain time. If (and it's a big if, with a conventional loan) the lender requires certain repairs, and the seller does not wish to do the repairs, then the buyer walks away with their earnest money -- because they are unable to obtain financing. (All of this is assuming that the buyer is adhering to the contractual deadlines.) It is NOT the buyer's fault if the bank requires repairs.

OP, it's common to see repairs required for FHA and VA loans -- but not for conventional loans. If you are within your due diligence period in making the requests for repairs, and the seller refuses, then in many states you can simply walk and retain your earnest money.

What does your agent say?
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Old 07-22-2016, 11:01 PM
 
Location: Georgia
4,562 posts, read 4,090,588 times
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Quote:
Originally Posted by LucidDreams View Post
SoÖ and this is what the original post was aboutÖ if the Appraisal ends up requiring a repair, then are there things that I could propose to my loan company as an Alternate to fixing whatever. I like the idea of proposing to put the money into escrow, or pursing a 203k loan perhaps. Iím looking for additional creative out-of-the-box ideas. Iím hoping that there are no problems with the Appraisal, but just in case there are, Iíd like to fire off some great alternatives to repairing right away! Hope for the best and prepare for the worst!
And we are telling you -- it's a BIG IF that the conventional appraisal will require repairs. So I would really not count on that happening.

Pursuing an FHA loan at this point would be time-consuming, and may be counter to your contract. I know that in Georgia, we generally specify the kind of loan that is being applied for. So saying that a buyer is applying for a conventional loan, and then coming back to the seller with an FHA loan that requires repairs is a no-go -- because it's possible that the seller would never have accepted your offer if you had told them you were getting an FHA loan in the first place, because THEY DON'T WANT TO PAY FOR REPAIRS. So you would be in breach of contract -- and lose your earnest money.

They don't want to pay for repairs. You can't make them. Decide if you want the house badly enough or not, and proceed accordingly.
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Old 07-22-2016, 11:10 PM
 
Location: Georgia
4,562 posts, read 4,090,588 times
Reputation: 15768
Quote:
Originally Posted by jghorton View Post
The time to negotiate 'repairs' was before you signed the contract. At this point, your best bet is to wait it out and see what happens. If there is a gap between what you are paying and the appraised value, you will likely have an opportunity to put more cash into the deal (but, the question would then be, "Why would you want to pay more than the appraised value for the property?")
Huh? You don't usually negotiate repairs before you sign a contract. You have no idea what repairs are needed unless you have had a property inspection -- and almost no one gets a property inspection until they have a binding contract.

The appraisal issue is a little more complex. If you have a house that is $300,000, and the appraisal comes back at $290K, then there are three options:

1. Seller reduces sales price to appraisal value. (Unless there's a problem with the appraisal, the seller is going to have the same problem with the very next buyer, too.)
2. Buyer to increase amount of cash required at closing. Many buyers cannot afford to do this - the mortgage loan is only based on the appraised value. So a 90% loan for a $300K loan would be $270,000. For a $290,000, it's $261K. That's $9K more than the buyer expected.
3. They meet in the middle -- buyer coughs up $5K, seller gives up $5K.
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