Dutchess5513, Renter in Los Angeles, CA

Why would the buyers lender appraiser want them to fix chipped paint on the inside of the house when the outside is chipped too, selling as is?

Asked by Dutchess5513, Los Angeles, CA Tue Aug 23, 2011

the inspection contingency has been removed,and there is no appraisal contigency the buyer removed it they are going to renovate the home, due to crack in foundation they asked for 5k we only gave them 1/2 our broker said to out of good faith so why must they do this (paint and fix to tear down). and is it odd for them to have a broker in the same office! should we have been notified ..it seems all the prospects they brought to us were in house. all of them!I dont feel we are being fought for it seems as if they are more worried about making both smile but i am not...we are a few blocks from short ave elm ...i hear the going rate is atleast mid 5's

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If they didn't apply for a loan program that is for renovations, then their lender is expecting the home to not have any deferred maintenance - and chipped paint on the inside (although it sounds minor) could be something the appraiser determined to be deferred maintenance. Personally if I was the seller in this situation, and the buyer needs to have something fixed in order for it to pass an appraisal, I'd push for the buyer to pay for it out of their own funds prior to closing. After all they were the ones who chose to purchase without an appraisal contingency and to purchase the home "as is".
2 votes Thank Flag Link Tue Aug 23, 2011
sounds like an FHA loan, there is a loan contingency so if the paint is not up to FHA standards then they can't close. I like the Shane Milne's answer and agree with it.
1 vote Thank Flag Link Tue Aug 23, 2011
2 things:
1) If they are using FHA financing then they have no choice. If the appraiser pointed it out in the report then it has to be fixed. The fact that they removed the inspection and appraisal inspection just means that that you don''t have to pay for any of those items as the seller and that they will close the escrow regardless of the condition and value. The buyer must fix it to get financing.
2) The agent has a fiduciary obligation to you. If you feel this is not the case I recommend that you take it up with the broker.
1 vote Thank Flag Link Tue Aug 23, 2011
It probably has to do with the lender and not the buyers at all. Many lenders have requirements for property they lend money on.
0 votes Thank Flag Link Mon Nov 24, 2014
Hello Dutchess5513, Your first question is it odd to have another broker in the same office, I would say no to this as there are over 150 agents operating out of my Keller Williams office here in Marina Del Rey, CA. It sounds like you feel you are being duped with a price lower then you would ideally want but current market conditions are tough and without knowing the details of the property it is difficult to discuss this matter further. I really do trust that working with your Realtor® to discuss how you are feeling would be in your interest as he/She knows you best. As for the lenders, a multitude of demands can be put on the buyer before funding which obviously can frustrate both the seller and buyer, I wish you all the best with your future dealings. Christopher J Rogers Realtor®
0 votes Thank Flag Link Wed Aug 24, 2011
If repairing some chipped paint is all that is needed to get this done, why not just do it? I think you are doing well. Recently I have seen lenders getting stricter and even requesting to review inspection reports which never used to happen. As we know, many lenders are undergoing lengthy appraisals but then those are followed by yet another last minute appraisal (appraisal review) just before funding which sometimes kill deals hours before closing. And, if this is FHA, you are doing very well. My experience has been that FHA appraisals are unpredictable at best. I have had deals where there have been basketball sized holes in the floors and the bank only wanted to have some chipped paint on the exterior repaired to fund.

As for your agent, you chose that person so your best bet is to stand behind them 100% unless you have proof that they have not represented you fairly. Too often the agent is to be blame for circumstances beyond their control and it winds up making the deal harder for everybody and ending with poorer results. It’s important to understand that not all agents are the same. You typically get what you pay for both in research and in commission.
0 votes Thank Flag Link Wed Aug 24, 2011
Dear Dutchess,
It is sounding like you have lost faith in your agents and that is not a good thing. It's very important that you have trust that they are looking out for your best interests in the sale of your home. If you seriously doubt that fact..I would consider looking for another broker to represent you.
Foundation problems can be expensive to fix,but it doesn't sound like it's that serious from what you discribe here.
As far as prices go, we normally judge based upon 1.experience in the area and knowing what other similar homes have sold for recently. 2. Real market statistics (which prove the selling prices of similar homes) 3. Broad market knowledge ( homes and business trends) of the area.4. Location (very important) 5. Amenities (what does this house have..that others don't).
0 votes Thank Flag Link Wed Aug 24, 2011
Emily, although the question is not referring to FHA specifically, I have to tell you that I have had closings held up many times over chipping paint. In fact, the last one not only had to scrape and repaint, but when they went back out for final approval, it didn't pass because some of the paint chips from the exterior still remained on the ground.

I also had one less than a year ago that had two different colors of paint (it was obvious that they hadn't completed the painting job), but the colors were very close. This painting was required to be completed before acceptance.

And the list goes on..............
0 votes Thank Flag Link Wed Aug 24, 2011
One theory...........

If this is an older construction, 1977 or older and may have lead based paint the chipping and pealing may be considered a health hazard. Regulations call for the stabelization of lead paing by being repainted to contain or cover the possibly hazardous material.

Only a theory.....

0 votes Thank Flag Link Wed Aug 24, 2011
No FHA appraiser is going to hold up the sale over paint chipping. I don't know why we're talking about FHA rules, I haven't seen in the questions any reference to FHA financing. Anyway, we like to reference FHA appraisals because they're the most conservative. The things an FHA appraiser will call out are: Broken/Cracked windows, exposed flooring, permit / addition issues & probably the cracked foundation if it is a major problem.

If the buyer is going to just tear down the house, I don't see why they'd be getting FHA financing, because they're probably getting construction financing. If they're not getting FHA financing, this means they have money & are putting up a larger down & they shouldn't be barking about a $5K issue IF the house is going to be torn down anyway.

If your home was in the MLS & it was priced right, I don't know why you weren't getting showings from other brokerages. It's not unusual for 1 broker to be representing both parties. Believe me, everyone involved wants to get it closed. ***You would have been notified on the 1st page of your purchase contract if the same brokerage is involved in the same transactions, even if there are 2 different agents assigned to each party.

I can tell you're frustrated not sure who to believe. If you're still concerned in the morning, I suggest you pick up the phone & call a loan broker & ask them about your case, with the buyer needing more time & why do things need to be fixed if the new owner plans to tear down the house...things like that.

You can always email me directly, if you have any other questions or concerns. After 15yrs in this business, I think I've seen it all.

562-430-3053 c
Realtor Since 1996
Main Street Realtors
0 votes Thank Flag Link Tue Aug 23, 2011
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