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Hi- Just had an inspection on a home and unfortunately it did not go well. There are several areas that need to be further investigated (rather large cracks in concrete slab, cracks in foundation,etc). There were so many hidden issues that we did not see when we looked at the home. We live in a very competitive market (bidding wars are the norm) so were really excited we had an accepted offer. We did go in with no mortgage contingency and are worried that if we decide to go through with the house- we will eventually have issues with our mortgage due to all the issues (some fire code issues, unsafe deck, electrical, etc). Question-can a mortgage not go through because of said issues or will it not appraise (even if comps are good) due to these issues. Does the bank care about such problems or not even related? I do not think the sellers will even consider crediting us for anything as they have several other offers behind us. HELP?!
I was told by my realtor that going in with no mortgage contingency is they only way our offer would be considered. She said where we live (NYC area) it is either cash or no contingency. But now- I am concerned that bank may deny us a mortgage if they think there are too many issues- and then we lose our deposit. Thinking I may have to walk on this and try not to think about the $700 lost on the inspection.
So what was you plan if you couldn't get the mortgage?
Finding issues from an inspections is a given. Some issues are not really issue to buyer nor bank. Further investigation from inspection report may mean more out of pocket money. This is why you need to think about how much deeper you want to go. $700 in a real estate transaction is really nothing in the big picture. Consider it a lesson learned.
Yes, my bank cared about such issues. Before I bought my last place the bank insisted that many of the inspection items be fixed (foundation, earthquake sheer walls, back deck). I would never go into a contract without an inspection and financing contingency. Call you bank for clarification.
Think of it this way: that $700 spent on the inspection may just have saved you the loss of your EMD when the bank starts making demands for repair of those expensive items: foundation for one. It could be inexpensive fixes or it could be thousands.
Never consider the money spent on an inspection as wasted. Imagine if you had not done that and wound up in a money-pit to the tune of many thousands - in interest alone on a 30 yr mortgage in addition to expensive repairs.
Personally, I'd walk and I would never agree to a no-mortgage-contingency.
I'm also going to make a leap and assume you did not have your own buyers' agent. Foolish mistake #1 which led to mistake #2, IMO.
Think of it this way, "The $700 invested in the inspection did exactly what it was intended to do!" It uncovered 'hidden' problems that may now keep you from making a poor investment.
Every house has problems. If you believe yours can be cost-effectively remediated, then get 1-2 estimates from reliable contractors and submit them to your mortgage company along with area comps.
If the bank uncovers more problems and believes the remediation cost is higher than you expect, you may have an 'default out' on the basis of the seller's failure to disclose known problems. This might also give you some leverage in recovering your inspection costs through small claims court.
Thanks for all the information. Yes- NY Annie- of course I had a buyer's agent. In speaking with others in my neck of the woods- presenting offers with no mortgage contingency is pretty much the norm when there are multiple offers on a home (also the norm). Realtor said I wouldnt have a shot unless I could pay all cash or go no contingency. I also just learned, since the roof on this house needs to be replaced, bank could decline due to that as well. So I have heard. But inventory is so low and demand so high- so we are all becoming a bit desperate here. But, that being said- too risky for me. Thankfully no contract signed and as some of you mentioned $700 lost is nothing compared to what could have been lost. Thanks again!
jego, while you and I may think "of course I had a buyer's agent" but if you read through the forum a little, you'd be surprised to learn that a good number of the people writing in with an issue do not. Surprise! that may be why there's an issue.
So I'm sorry if my assumption upset you, but chances were that you didn't given the circumstances.
My son just went to contract on a home in a very hot market...had both a home and termite inspection...report came back with termite activity and recommended having the whole house tented...yes the sellers could have refused to pay for the tenting ($4k)...but they didn't because they realized they now would have to disclose it to future buyers! so it would cost them in the end anyway...this was the second home that my son paid to be inspected...but it saved him from major future heartache and expense...I would either walk away or ask seller to make repairs...it couldn't hurt to try!!!
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