I am buying this house through an FHA loan. The inspector said that the house needed to be painted, some rotting boards needed to be replaced and a tree needed to be trimmed. We planned to do this when we moved in but it has to be done before it closes. The seller would take care of it but is strapped for cash. He has offered to take a certain amount of the selling price to fix the problems stated. What can I do to get this house?
2007-11-03 05:47:31 · 15 answers · asked by mechanical_prints2 3 in Business & Finance ➔ Renting & Real Estate
The repairs are actually pretty minor the rotting boards are mostly trim and a few boards on the deck that were left untreated. The tree is small and can trimmed quick. The only problem is I can not pay for these repairs or do them myself. He is willing to take a good amount of the selling price to help pay for these repairs. I just didnt know what to do with that money.
2007-11-03 06:02:24 · update #1
He can have the repairs done and the bills put into escrow. When home closes the painter and tree trimmer would be paid. Easy as pie. Good Luck!
2007-11-03 05:51:41 · answer #1 · answered by ziggymo2 2 · 1⤊ 0⤋
Talk to your lender about an FHA 203(k). This FHA insured loan allows you to borrow against the renovated value, and you can even roll up to six mortgage payments into the rehabilitation escrow if you aren't going to occupy the house during the renovation.
It's a specialized loan, and many bankers are unaware of it, or just don't want to deal with the complexities. The link at the end is an unbiased definition of the loan via HUD.
If your lender can't do this loan, or if you can't find a banker trustworthy enough (they can be tricky), please click on my profile and send me an email. I have a specialist at my bank that exclusively writes these loans, and he'll get it done right. I'd be glad to refer you to him.
http://www.hud.gov/offices/hsg/sfh/203k/sfh203kc.cfm
PS - Still squeeze the guy a little for the problems. You deserve a better price for the extra time and effort.
You know... the more I think about it, paint and a few rotting boards shouldn't stop an FHA loan. And definitely not an overgrown tree. FHA isn't like that anymore. If you'd like, black out all your personal info and email me a copy of the appraisal, or just the pictures of the items "to be cured". I have a feeling you can get a regular FHA loan with no problem. I'd be happy to help. Press your lender about it a little.
Good luck on your new home purchase! I wish you the best!
2007-11-04 19:37:18 · answer #2 · answered by Mike 1 · 2⤊ 0⤋
Well, what immediately comes to my mind is that if the repairs needed are that extensive that the cost of doing them is significant, I wonder if that house is worth buying in the first place.
Replacing some rotting boards, giving the house a paint job, and trimming a tree - if that actually is the extent of the work needed - didn't ought to add up to anything mind-boggling, so have an expert make a determination of the cost of that work, and get the seller to deduct that amount from the asking price.
I don't think it's a good idea to simply ask for the repair cost to be factored into your payments because that means you will be footing the bill for that repair and restoration work. The seller should be the one who suffers the loss of value on this property.
2007-11-03 13:03:37 · answer #3 · answered by sharmel 6 · 0⤊ 2⤋
You have to be VERY careful with a situation like this. One of my first sales was exactly like this. If you had a non-FHA/VA loan you could escrow the amount for the repairs as the seller has suggested or simply take the house as is. You can't do this at all in your situation. You only need to do the repairs pointed out by the FHA appraisal, the rest can can be escrowed from the seller proceeds. You have 3 options:
Get the seller to find someone to loan him the money short term because he will have the money to pay it back when the closing occurs and have the job done professionally. After all, if he is strapped for cash he must not be able to pay the mortgage and if that is the case he won't likely be able to see any proceeds of a sale period. Press the seller HARDER!!!
Convince the seller to allow you to do it yourself
Buy a different house or get a non-government insured loan
If the first appraisal has not been submitted to underwriting you might be able to pay for another FHA appraisal from an appraiser with a vision problem who could overlook the necessary repairs.
2007-11-03 14:13:43 · answer #4 · answered by linkus86 7 · 1⤊ 3⤋
Get an estimate of all the repairs and total it up.
Take into consideration that estimates are only that--ESTIMATES. Usually the done job is a little more.
Deduct the amount from the selling price, and pay less for the house. If the seller will not be reasonable, cut your losses and look elsewhere. If you try to do the work yourself, housing inspectors are very finnicky and the work may not be up to his standards. Get it professionally done. Since the house is not yet in escrow, you can back out and look elsewhere. It is the sellers responsibility to get the property up to code before he sells. Make sure his offer is very good.
Good luck and may God bless you.
2007-11-03 13:02:11 · answer #5 · answered by kathleen m 5 · 1⤊ 2⤋
Are you working with a realtor? Ask him/her to write an agreement that the seller will pay for all repair at closing (the sell amount less the repair amount). Check around for some contractor who would only bill at closing (they do the work now and get pay at closing). That way you will get the house and the owner don't have to worry about repair money at this time. Good luck.
2007-11-03 12:55:15 · answer #6 · answered by TheOne 4 · 1⤊ 1⤋
The money should be deducted from the sales prices of the house and put into escrow with the stipulation that the money can only go to a contractor that does the work.
Or tell the seller to break out his credit cards, ask his family or go to payday loans to get the money to pay for it.
2007-11-03 12:53:25 · answer #7 · answered by Peilthetraveler 5 · 1⤊ 1⤋
Your real estate agent is the person to ask. He or she can help you find a legal way to solve this problem. If you are thinking of making a private deal with the home owner you might get into trouble and wind up having it cost you much more than the price of a trained agent.
2007-11-03 12:56:39 · answer #8 · answered by Rudolph'sGrandma 3 · 0⤊ 1⤋
See if the selller with deduct the cost of all these repairs from the selling price(if it means that you will have to do the repairs yourself).
Then, if this agreed to, check with the inspectors to see if this is acceptable with them.
The inspectors may say yes or no. If they agree to this they may put a time frame on whrn the repairs have to be done by. They will reinspect to make sure its done.
2007-11-03 12:56:11 · answer #9 · answered by boilermakersnoopy433 4 · 0⤊ 2⤋
Since the sale is pending and he will have money from the sale he could borrow the money from a friend or relative (not you) and pay them back when the sale closes.
2007-11-03 12:54:40 · answer #10 · answered by b0bb347 2 · 0⤊ 2⤋