Home Buying in San Francisco>Question Details

Aaron, Home Buyer in San Francisco, CA

During purchase of a Short Sale, the appraisal tagged the roof as needing repairs before loan. What are my options?

Asked by Aaron, San Francisco, CA Tue Aug 12, 2014

We knew that the roof was old and were planning on replacing the entire roof within the first year rather than waste money on a $2,500 2-year roof cert. However, with the appraiser tagging the roof, they say we have to pay for a cert upfront which means we have to pay cash to close since the closing date is too close and the banks refuse to extend the closing date. Are there any other options? What about if we show that we have the reserve funds for a roof replacement? Help!

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I would suggest contacting your bank and explaining to them your plans. They may way the appraiser's comment on the roof if you can guarantee it will be fixed not long after purchase. Showing the bank your reserve funds may help prove intent. If all else fails, try contacting your realtor or the sellers to see if you can negotiate roof repairs. http://www.burrogeroofingva.com
0 votes Thank Flag Link Fri Jun 12, 2015
Aaron, that's a great question regarding other options for your roof repairs. Have you had a chance to speak with your Realtor about this? I know many times it could be a good option to speak with a few licensed, reputable, and trusted roofing professionals to see how much a new roof would cost. Sometime's this could be negotiated with the sellers. Either way, you want to make sure you have a good water-proofed roof to avoid further damage. http://www.roofingplus.com.au/roof-restoration-adelaide
0 votes Thank Flag Link Mon Jun 8, 2015
That's tough since you don't want to waste money doing a repair on something you are going to fix anyway. It might be a good idea to talk to the bank about your plans. They might be more lenient if they know what you want to do. http://karbellaconstruction.com
0 votes Thank Flag Link Fri May 29, 2015
I would have to agree. It would be a good idea to talk with your roofing contractor and the bank. It would be a waste to spend money on repairs when you plan on redoing the whole roof anyways. Maybe the bank will be a little more lenient. http://www.cooperroofing.biz/
Flag Wed Jun 3, 2015
You could talk to the lenders about what you have, and what you're planning. With that information, they might be willing. If they aren't though, you'll probably have to pay the cert. I don't think this should be too much of a problem considering that you do have the money to do that. I would definitely suggest doing some research to learn your options, but beyond that, I think you're kind of on your own with this one.
0 votes Thank Flag Link Thu May 21, 2015
Do you want the house or not?
The lenders often have other ways to unload the property w/o a short sale.
0 votes Thank Flag Link Sat Aug 30, 2014
do you want the house or not?
You do not argue with the bank as they have other ways to unload homes.
0 votes Thank Flag Link Sat Aug 30, 2014
Aaron: Reading you Q & response suggests you know what you're doing. $35K is a lot of roof! $2,500 may be a total waste, but it's a cost of doing business that I'd expect you will deduct. I you do close this deal, my best advice would be to shop that roof repair very aggressively, Since most roofers work in a location where the property owner does not or can not easily watch them, there is no way to know the quality of their workmanship.

Roofers prices seem to have a lot stronger correlation to what they think they can get out of you, or what they feel like charging, than to the actual costs of materials, labor, overhead and profit. I found a very good roofer in S.F. who wanted $6K for 900sf, then I found another who wanted $4,500 for the exact same thing. After I showed him how I patched it by myself, the owner made me a cash offer on the last day of the month $3K. SOLD! And I got what I wanted, and watched them do the work. It sounds like your building is much bigger, but it's the same process.

Good luck!
0 votes Thank Flag Link Wed Aug 27, 2014
As a lender I have to disagree with some of the advise you have been given.
1) If you have a date you have to close by which is approaching you cannot switch loans to a FHA renovation loan. Those are not a quick loan to switch too and generally open up a larger can of worms then they close
2) Ask your lender if they will do a escrow holdback for the roof cert.
3) Have your agent negotiate the seller to extend the coe and pay for the roof to be brought to a decent condition
4) Get a rush on the roof repairs and get the cert done. Is it one company saying it will cost $2500? Have you tried another roofing company to see if they can clear it for less?

Bottom line if the short sale bank will not give you the time to fix the financing issue of their poorly maintained liability then let it go. Appraisers generally only call out roofs that are health and hazard issues.
0 votes Thank Flag Link Fri Aug 22, 2014
Good question!

If you already plan on repairing the roof soon after purchase, perhaps you can get in touch with a contractor, find out the cost, and get the permits aproved for the work you need to do. Permits for simple jobs like this are relatively easy to get and can be done over-the-counter, without any sort of extended approval process. Often, you don't even need to submit plans to the city.

I'd guess that the bank would accept proof of a permit and an initial retainer with a contractor for the work as proof that the work will be complete in a timely manner, and get escrow moving smoothly again.

If you need help finding a contractor or with the permit process, don't hesitate to ask!
0 votes Thank Flag Link Tue Aug 12, 2014
Getting the permit from the contractor sounds like a good way to get things started. Maybe with the proof of working on getting the roof repaired it will make it so you don't have to purchase the expensive certificate. You could also talk to someone at the bank and get a second opinion.
Flag Tue Nov 18, 2014
You have seveal options.
The first of which is FIRE YOUR BANK.
If you don't you really shouild not expect success.

Now that you have secured a 'Clear to Close' from the lender recommended to you by your REALTOR, have your REALTOR construct a roof repair escrow or even an FHA renovation loan. Consult your REALTOR.

If you don't change lenders, you are setting yourself up to be left at the alter by your bank.
Be aware, you are going to need to spend some money. If $2,500 is a show stopper for you, there exists the possibility you are not yet ready to be a home owner.

Fire your bank. OH, who is the lender in the case you describe?

Ahhh, short sales, aren't they wonderful?

Best of success,
Annette Lawrence, Broker/Associate
Palm Harbor, FL
0 votes Thank Flag Link Tue Aug 12, 2014
Thanks for your advice about me not being ready to be a home owner. In fact, I already am a home owner and adding this to my portfolio. However, spending $2500 in advance to closing (with no guaranty that we close) when I'm already going to be spending $35,000 on a new roof within a year doesn't make a lot of sense. But even more so, if you would have read my post, I clearly say that there is not enough time to complete a roof cert and close with a loan in time.

Additionally, It was my understanding that the new rules no longer allow for a "Roof Repair Escrow" (I think previously you had to put 1.5x the estimate in escrow but the new rules no longer allow that).
Flag Tue Aug 12, 2014
You are not going to change the lender's opinion about the roof repair. Lenders tend to be highly inflexible these days.

Do you have a buyer's agent? If so, this is a question to discuss with him or her.

If not, I would get one! Short sales are difficult transactions and really should not be taken on without any guidance.

Good luck.
0 votes Thank Flag Link Tue Aug 12, 2014
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