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My fiancee and I just entered attorney review our first home and we are using Freddie Mac's Home Possible 95 mortgage for public service employees (she is a teacher) and as with all FHA loans, any needed repairs to the property as dictated by the FHA home inspection will need to be completed prior to closing. We actually offered asking price for the home for two reasons-first because we cannot close until June 30th (which the seller is fine with), second because we know that FHA inspections are very stringent and some sellers shy away from buyers with FHA financing as a result.
We specified to our attorney our contract should state that any needed repairs (as dictated by the FHA inspection) would be paid for by the seller. The seller's attorney wants just the opposite. We are waiting to hear from the seller's attorney to see what sort of compromise they will offer if any. The thing we can't understand is that there is nothing overtly wrong with the house. It has public sewer and water, so there are no demons lurking in the septic or well. The furnace, hot water heater, washer/dryer, and central air unit are all less than two years old, so I can't see there being any problems there. The roof looks decent/no leaks and there is no sign of settling, cracking, or water infiltration in the basement. At most I could see the FHA inspector perhaps nitpicking an electrical outlet or something trivial, but nothing major.
I suppose that there could be termite infestation or something else "unseen" that could cause a problem, so could it be assumed that the seller knows there is something major "hiding" that the inspector will uncover that will cost $$$ to fix? What can I do in order to perhaps compromise in a way that the seller will be comfortable and at the same time I won't get burned? Could I propose that we pay for a home inspector (on our own dime of course) to come in now to examine the property and if there are any major problems whose repair and cost cannot be agreed upon we'll simply take our deposit and walk away?
We really want this house, but again, we're first time buyers and are very afraid of being stuck with a lemon/money pit. Help!
I would have your attorney advise their attorney that you are making this offer predicate to the property being in good repair and operating condition as being disclosed by the seller. Any repairs necessary to make the property meet those conditions should be paid by the seller or the price of the house must be adjusted accordingly.
DO NOT FALL IN LOVE WITH ANY HOUSE, EVER!!!!
If you are not willing to walk away from a real estate deal you are only going to hurt yourself financially. You can only negotiate from a position of stregnth and if you are emotionally tied to a house you have given that position of power to your negotiating opponents.
You should absolutely have a home inspection and you would pay for this, but it is money well spent. Are you using a realtor? If so, they should be able to provide you a list of home inspectors to choose from. Make your offer contingent on a satisfactory home inspection and request the seller's pay for anything that needs repair.
I completely agree. They should be happen that you didn't try to haggle down to a lower price - especially in this market. You have the upper hand. Use it.
Good luck!
Quote:
Originally Posted by johnrex62
I would have your attorney advise their attorney that you are making this offer predicate to the property being in good repair and operating condition as being disclosed by the seller. Any repairs necessary to make the property meet those conditions should be paid by the seller or the price of the house must be adjusted accordingly.
DO NOT FALL IN LOVE WITH ANY HOUSE, EVER!!!!
If you are not willing to walk away from a real estate deal you are only going to hurt yourself financially. You can only negotiate from a position of stregnth and if you are emotionally tied to a house you have given that position of power to your negotiating opponents.
You should absolutely have a home inspection and you would pay for this, but it is money well spent. Are you using a realtor? If so, they should be able to provide you a list of home inspectors to choose from. Make your offer contingent on a satisfactory home inspection and request the seller's pay for anything that needs repair.
Just to clarify, I realize that a home inspection is part of the deal, I was just proposing to get a "pre" home inspection BEFORE the FHA inspector comes in. At that point we would have a pretty good idea of whether or not the FHA guy would fail the property for anything and at that point we could haggle over who pays to fix it. So in essence, we'd have two inspections.
I would have your attorney advise their attorney that you are making this offer predicate to the property being in good repair and operating condition as being disclosed by the seller. Any repairs necessary to make the property meet those conditions should be paid by the seller or the price of the house must be adjusted accordingly.
DO NOT FALL IN LOVE WITH ANY HOUSE, EVER!!!!
If you are not willing to walk away from a real estate deal you are only going to hurt yourself financially. You can only negotiate from a position of stregnth and if you are emotionally tied to a house you have given that position of power to your negotiating opponents.
Agree with you completely, especially since the OP offered 100% of the asking price. Asking the seller to contribute something is not out of the question.
Just to clarify, I realize that a home inspection is part of the deal, I was just proposing to get a "pre" home inspection BEFORE the FHA inspector comes in. At that point we would have a pretty good idea of whether or not the FHA guy would fail the property for anything and at that point we could haggle over who pays to fix it. So in essence, we'd have two inspections.
I just want to jump in here and ask if you're clear that an FHA inspection is NOT a home inspection nor should ever be substituted for one.
It's my understanding that the FHA does what's basically an appraisal. This appraisal is mainly about the value of the house. It should not be confused with a home inspection, which is when you pay an inspector to come in and inspect the home for defects.
I hope that I can include a link to a brochure that talks about this in more detail:
FHA will not be doing a "home inspection" on the property. Just an appraisal and they have actually loosened up the amount of paperwork and info they request. The appraiser must note anything that they see physically wrong with the home that could affect value i.e. rotted siding, hole in roof, etc..
And that attorney is just playing games. Seller should pay for any repairs, YOU are buying their house! For full price!!!
Which is why I hate attorney states. It's a whole different ball game.
Anyway, there is no 'inspection' as stated above. The VA sends out their own inspectors, although they have to have loosened up on that, but FHA just does an appraisal and will note if there are structural problems which include the heating/ac units, etc. But, your own home inspector will do the rest.
It's a little scary to me that your attorney doesn't know that and if you're working with a Realtor®, why they haven't explained all of this to you.
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