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There's a house my husband and I are interested in. The entire house needs new flooring. Is it possible when writing up an offer/contract to include putting X amount of money in an escrow account to pay for flooring after close?
I've seen ads before that offer a roofing or flooring allowance because it needs to be replaced but wasn't sure how it works.
As long as you and the seller can agree, you can approach it that way or any other way you like. If you have an agent, brainstorm with your agent to come up with different scenarios that will work for you, then present the best one for you first , having the others to fall back on if the seller doesn't accept the original idea.
Usually, an amount is taken off the purchase price or is allowed by the seller as a credit at closing but money can be set aside in escrow. If you go that route, I'd definitely get an attorney to write it up whether or not the use of an attorney for a real estate transaction is normal in your area.
How is the need for new flooring decided? Is it your personal taste? Does the seller already know and has already reduced his price below neighboring homes sold?
How bad is the floor? Will it pass lender appraisal?
Is it possible when writing up an offer/contract to include putting X amount of money in an escrow account to pay for flooring after close?
Sure, anything is possible. As bbronston noted, however, there may be other ways to accomplish what you want. A reduction in price or a credit back to you at closing may be simpler.
The seller knows it needs to be replaced. This is an estate sale. Then entire house is carpet, even the bathrooms and kitchen. All original, close to 40-50 years old. Not sure if it'd pass appraisal or not. It might since we'd be doing a conventional loan vs FHA so the inspections wouldn't be as strict from what I think I've read.
Sure, anything is possible. As bbronston noted, however, there may be other ways to accomplish what you want. A reduction in price or a credit back to you at closing may be simpler.
How does a credit back at closing work? Would we get a check?
How does a credit back at closing work? Would we get a check?
Possibly. Why not just have the Seller replace most of the carpeting before closing? You could pick the color, etc. Adjust the purchase price as needed.
Possibly. Why not just have the Seller replace most of the carpeting before closing? You could pick the color, etc. Adjust the purchase price as needed.
It's an estate sale and I don't think the family handling it live near the home. Someone would need to be there when the flooring people came for measurements and to do the work.
I'm not sure as to how lenders currently feel about cash back at closing or escrowing money for repairs, but I do know that 2 years ago buyers getting checks from sellers was not allowable in many instances. Buyers and sellers had to sign a document that indicated no other money was being exchanged other than what appeared on HUD statements. Lenders also did not like escrows for repairs or replacements. I can't imagine this has changed much. If anything, I would guess it is more strict.
Before you make an offer I would recommend that you speak to your lender about this and what is/is not allowed.
BTW--there is a difference between an appraisal and an inspection. FHA does appraisals--not inspections.
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