Home Buying in 75043>Question Details

Marcela, Real Estate Pro in Dallas, TX

I have a buyer willing to pay for a repair that is a condition on a loan. The seller agreed to repair all except this.

Asked by Marcela, Dallas, TX Fri Jan 27, 2012

Is there a way buyer can put additional escrow money towards the repair? Would a lender approve something like this? If so, I am assuming I would need an amendment and lender´s approval?

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Barbara Coker’s answer
It would be very unusual for a conventional appraiser to even require such a small cosmetic repair. Just a little paint? I'd trade it off for $200 in closing costs, and have the seller get it painted. Heck, I'd probably just go in with a little paint and do it myself.
Barbara Coker
NMLS# 228545
Web Reference: http://www.thecokerteam.com
0 votes Thank Flag Link Fri Jan 27, 2012
Many more questions requires answers. Go direct to your Realtor or mortgage broker who is handling your entire file.

Lynn911 Dallas Realtor & Consultant, Credit Repair Advisor
972-699-9111
http://www.lynn911.com
0 votes Thank Flag Link Fri Jan 27, 2012
To let you know more about this transaction...

Well, the repair is a very small half wall that has some discoloration. The seller does not want to repair the wall nor will accept the buyer to repair it before closing. The repair will not cost more than 200.00. The loan is a 30 yr conventional loan where my buyer is putting 20%.
0 votes Thank Flag Link Fri Jan 27, 2012
It's always best to keep things simple to get a loan through by doing it during the negotiations with buyer and seller by wanting other things added you complicate things and risk getting a loan. so KISS is the best to keep in mind.
0 votes Thank Flag Link Fri Jan 27, 2012
As a loan officer, my first question is to what type of loan this is. I know that on some repairs, lenders will allow an escrow for repair, often at 1.5% the cost of the repair. You get into the issues of who will hold it, and even if there will be an extra fee for so doing.
I like Brian's suggestion of trading the repair for closing costs better. It would take an amendment of the contract, and a run back by the underwriter. You must make sure that this doesn't exceed the seller's maximum allowable closing cost per that loan type.
Good luck!
Barbara Coker, NMLS228545, licensed loan officer
Web Reference: http://www.thecokerteam.com
0 votes Thank Flag Link Fri Jan 27, 2012
As a loan officer, my first question is to what type of loan this is. I know that on some repairs, lenders will allow an escrow for repair, often at 1.5% the cost of the repair. You get into the issues of who will hold it, and even if there will be an extra fee for so doing.
I like Brian's suggestion of trading the repair for closing costs better. It would take an amendment of the contract, and a run back by the underwriter. You must make sure that this doesn't exceed the seller's maximum allowable closing cost per that loan type.
Good luck!
Barbara Coker, NMLS228545, licensed loan officer
0 votes Thank Flag Link Fri Jan 27, 2012
Typically not any more.
Potentially you could do 203k loan.

Depending on what the repair is, maybe they could do it before closing. This is risky and not recommended, but if it is small, worth the risk, and the only way to get the deal done, then maybe that's the way to go.

You can always ask the lender about the escrow part, but most won't allow this any more.
0 votes Thank Flag Link Fri Jan 27, 2012
Bruce Lynn, Real Estate Pro in Coppell, TX
MVP'08
Contact
Is it not possible to amend the agreement for the seller to make the repair and then the buyer pay extra at closing in cash? Seems like the easiest solution to me. Then you don't need bank approval, you just have to have proof that the repair was done prior to closing. As long as it doesn't change the loan to value ratio, you shouldn't have a problem.

Normally, lenders do not like escrows with repairs done after closing unless you are dealing with a rehab loan. MAYBE if you are dealing with a local lender, but certainly not one of the big lenders.

Just my 2 cents... that question would need to be addressed to the lender if you want/need to structure it as you have outlined here.

Brian Rayl
Keller Williams Elite
0 votes Thank Flag Link Fri Jan 27, 2012
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