Home Buying in Phoenix>Question Details

anthonyleofa…, Home Buyer in Phoenix, AZ

who is to verify that a property meets usda guidelines (location, etc.)? buyer, mortgage broker, real estate agent, or someone else?

Asked by anthonyleofanti, Phoenix, AZ Mon Jul 29, 2013

usda loan denied because of water well guidelines. it states 4 to a well, this property had 5 to the well. i recieved the well agreement after my offer was accepted. earnest deposit, appraisal fee, inspection fee, pest/termite fee already paid. gets rejected 2 days before closing. is this something i should have caught? or someone else?

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5
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0 votes Thank Flag Link Mon Nov 9, 2015
Yes, it should have been caught and disclosed BUT there are so many guidelines and requirements changing so often and so quickly that realtors, title and escrow officers and loan originators miss things and unless you get the various reviews done and disclosed, it might not show up until you are well info the process and time frame of the purchase contract.

Personally, I like to have the well, septic, title and title history ordered and in review while we are waiting for the appraisal. But that would not have saved you the costs and fees.

Speak to your realtor and the selling realtor and see if they and or the seller will assist you with the fees or costs you have incurred. It does not hurt to ask and see if they will help.

I will tell you that I do not believe any ordinary realtor would have caught that unless they write ALOT of contract that are in that particular area or that are USDA loans. Going forward, any property that has less than city water, sewer, etc, make those contingent fees that the seller pays until the property passes the loan guidelines if you can... in a seller's market that is difficult to get through the negotiation process.
0 votes Thank Flag Link Tue Jul 30, 2013
The well disclosure should have been provided to you during the inspection period.
0 votes Thank Flag Link Tue Jul 30, 2013
Normally the lender will verify if a certain property meets the USDA criteria... and that should have been done once you had submitted your contract to them, also they should have provided a list
of requirements that a property needed to met under USDA guidelines or given you a site to gather the information regarding USDA requirements.

As far as the well agreement, Your agent should have gotten the well agreement as part of the disclosure process , all disclosures and any info related to the property is normally given to the buyer within 5 days from Contract acceptance, so you would have had time to review during your due diligence review period, ...but ultimately it is the buyers responsibility to do all his due diligence during his allotted time for all inspections and info gathering.. It is common knowledge that normally a shared well supports 4 homes... especially for USDA, and even VA the standard is no more than 4

I am sorry you had such a bad experience.
0 votes Thank Flag Link Mon Jul 29, 2013
thank you Margaret. I figured if a mortgage broker is going to offer the program, they would know the guidelines, but I guessed wrong. as for the common knowledge part, I do not believe that to be entirely true as my broker obviously did not know. id also like to add this was a va compromise sale/short sale. so the guidelines must have changed at some point since the sellers purchase, and my attempt. thanks again, for the info, it is appreciated.
Flag Tue Jul 30, 2013
It should of been caught, hard to borrow low down money on a shared well with 5. Pretty common knowledge.
0 votes Thank Flag Link Mon Jul 29, 2013
caught by whom though?
Flag Mon Jul 29, 2013
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