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Marilynn Wanamaker's Blog

By Marilynn Wanamaker | Broker in Denver, CO

INSPECTION OBJECTIONS and LENDERS


QUESTION: If lender won't allow escrow at closing for major repairs such as roof, sewer, and seller can't or won't pay for or do major repairs before closing, what is best way to accomplish negotiation?

(Problems):  (1.) Sellers can't or won't repair before closing. (2.) Large credits to buyer alert lenders who want specifics re what the credit is for (3.) An increase in purchase price does not accomplish this.. Buyers need cash in their pockets for repairs. (4.) Repairs significantly exceed buyer's closing costs; therefore seller paid closing costs also doesn't solve problem.
Creative suggestions appreciated!

Comments

By Don Maclary - Realtor* ABR*,  Fri Mar 8 2013, 15:15
Ask lender if they are ok with having contractors to do work and get paid at closing, or move on to a property in better condition.
By John Souerbry,  Fri Mar 8 2013, 18:50
If your constraint is "deal most close" - walking away is not an option. Ergo..... I recommend buyer hires a contractor to do the repairs prior to close and a) contractor files a mechanics lien to guarantee payment and b) buyer files a lien for the value of the work performed to guarantee closing. The value of the work performed is a credit to buyer on the closing statement.
DISCLAIMER: I take no responsibility for having provided this advice and make no warranty or guarantee regarding success of this strategy. All real estate transactions contain substantial risk to buyer and seller. Don't drink and buy or sell property.
Best of luck with this one!
By Scott Hulen,  Sat Mar 9 2013, 05:29
Switch it to a 203k loan with Wells Fargo. Fees will be higher but this type of loan will get the transaction done. Good Luck!

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