Dutchess5513, Renter in Los Angeles, CA

were selling as is the buyers lenders appraiser is requestin work to be done and the buyers will get us a hotel.during this time,do we allow this

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

escrow isnt even closed and they need an extension on their loan contigency too, can some one help me understand why they would need to fix this and it not theirs not only that what if it falls through we are stuck with work that may not be up to another prospects par..i mean our broker already convinced us out of good faith to give them 2500 for un anticipated expenses against my better judgement help...please

Help the community by answering this question:

Answers

10
BEST ANSWER
Hello Dutchess5513,

It's not uncommon for a prospective Buyer to request an extention on their loan contingency period. As Emily mentioned earlier sometimes there are delays with the Lender. These delays can therefore delay the removal of the Buyer's loan contingency. Your Realtor should be able to explain to you exactly why the Buyer's are making this request. This will allow for you to decide what your response will ultimately be.

With regards to the repairs. It's very common for Lender's to request that work be completed prior to funding a loan to purchase. These repairs are what is referred to as pre-funding conditions. The Lender believes these repair issues are safety and soundness issues. Therefore the Lender requires they be repaired prior to loan funding and close of escrow. Your desire to sell "as is" does not mean a thing to the Lender. I would imagine the Buyer's are trying to lessen the inconvenience for you and your family while the repairs are being made, hence their offer to pay for your Hotel stay. You do not see Buyer's making this offer very often. I think it's nice of them to make the offer to you. You will not be giving up possession of your home to them with regards to making the repairs. They will not be moving into the home during the repair period. You do not have to, nor do I recommend that you give them a key to your home. The repairs will be made and you have the right to let the repairmen in and oversee the repairs.

As far as the Buyer's $2.500.00 credit. You should know it's very common to see the "as is" in home sales. Infact, every Seller I have worked with over the years have told me they want to sell "as is". I explain to them that this is not always possible. I ask them to keep an open mind. The Buyer's will have various inspections. And therefore, things will be discovered that were unknown to the Seller. The Buyer has every right to request that repairs be made at the Seller's expense. It does not matter that the sale was "as is". You as the Seller have every right to reject the Buyer's request for repairs. However, the Seller must consider prior to rejecting the Buyer's request the severity of the repairs. Is the Lender requesting they be repaired prior to funding and close of escrow? Are these repair issues a big enough problem that any prospective Buyer will request they be made? If the answer is yes to these questions then the Seller will need to change their initial plans with regards to "as is". Now I cannot say that the repairs that covered the $2,500.00 in your transaction fell into this area. I'm not privy to those details of your transaction. However, it is very common to see Seller's make an exception like you made. And it does not mean that you got duped.

That being said, your Realtor must turn over to you a copy of the pre-funding conditions that show these repairs are infact required prior to loan funding and close of escrow. Simply telling you to use the email from your Broker does not cut it. You have the right to receive something from the Buyer's Lender that reflects these repairs. I would ask your Realtor again for a copy of the pre-funding conditions.

Lastly, I do not see anything wrong with your Agent working with all of the prospective Buyer's who have seen your home thus far. That is what you pay them for, to show qualified prospective Buyer's your home and ultimately sell your home. I hope this helps to answer your questions. Should you have any further qustions I would be glad to help. Good luck!

Matt
0 votes Thank Flag Link Thu Aug 25, 2011
Let me take a shot at this:

Q: were selling as is the buyers lenders appraiser is requestin work to be done
A: As mentioned below, if the appraiser is asking for work to be done, it MUST be done before the loan funds. Sounds to me like it is a buyer with an FHA loan or similar (Fannie Mae) – flaking paint and other such repairs are very common requests from an FHA appraiser. And it doesn’t matter if you are selling “AS-IS” – it’s a loan funding condition set by the bank. No repairs, no loan. You might not like it, but that’s just the way it is.

Q: and the buyers will get us a hotel. during this time
A: Sounds like they are willing to cooperate for the inconvenience this is putting you through.

Q: do we allow this escrow isnt even closed
A: Yes

Q: and they need an extension on their loan contigency too,
A: Often happens when conditions get thrown in by the underwriter – they issue the conditions and then everyone has to scramble to get things done. Extensions are VERY common in cases like this – the underwriter wants to make sure ALL conditions will be met before they sign off on the loan.

Q: can some one help me understand why they would need to fix this and it not theirs
A: It’s a lender condition. Banks have started asking for things like this – it’s VERY common – and there is nothing you can do about it if you want to close - except to do what the bank asks. I know you don’t like it and it does not seem fair in an “AS-IS” transaction, but it’s the way it is. Peeling paint is considered a health and safety issue by many appraisers, so they want it taken care of to protect the buyers. No repairs, no loan. And it has to be done BEFORE the loan is funded. We currently have a transaction in escrow where the underwriter is mandating that flaking paint chips be fixed AND an outbuilding be removed prior to funding.

Q: not only that what if it falls through we are stuck with work that may not be up to another prospects par..
A: Do everything you can from your end to make sure it does not fall apart. If it DOES fall apart, then there is nothing you can do – there is no recourse UNLESS the contingencies have all been removed.

Q: i mean our broker already convinced us out of good faith to give them 2500 for un anticipated expenses against my better judgement help...please
A: Without knowing all the details, we cannot second guess your broker – they are there to get the deal done for you and they are your legal representatives. If they recommended you kick in $2,500, they must have had a good reason.
.
2 votes Thank Flag Link Mon Aug 29, 2011
In this market I would generally do what needs to be done to close the deal. However I would not actually fix anything, I would just give them a credit. You dont really have your teeth into them unless the contingencies have been removed so if you do the work and they dont like it they may still be able to get out of the contract because they havent officially removed their inspection contingency. Best to credit and move on. Unless you have a better stronger offer, or they are being unreasonable, but unlikely that you do given this market. If you have more questions call me. 3103673372

this is not intended to be a solicitation.
1 vote Thank Flag Link Tue Aug 23, 2011
9/10th.................means nine tenths of the law. Possession is just that. If you allow someone to take possession of one or your possessions be it a bicycle, Mercedes or your home............once they have it in their possession they own 90 percent of it until you can legally separate them from it. Get It?

Sounds to me like you may be getting put together big time. Whatever you do don't lose possession of your home now. In fact you may want to be getting ahold of an attorney real soon if not the cops. This smells like a hostile takeover of your home right out from under your nose. Be very careful from here on out.
0 votes Thank Flag Link Wed Aug 24, 2011
Speaking strictly to the appraisal issue:

If there are lender required repairs then no matter what they are, or who pays for them, they have to be fixed and reinspected by the appraisar prior to closing. Failure to put the property into required condition will mean denial of the loan.

As-is sales are great for cash buyers...but if a mortgage company is involved and there are repair issues..there is no middle ground. Someone mentioned a credit...most lenders won't allow the seller to do anything outside of routine closing costs because it could be misconstrued as an inducement to buy.
0 votes Thank Flag Link Wed Aug 24, 2011
first ty all for the feedback ..John can you tell me exactly what you mean about the Possession being 9/10 . I dont feel right about them doing this why cant it be done on their time once we are gone is this what they make all buyers do for a 125,000 loan..its as is.... I think something us up...and when i asked my broker for documentation from the appraisers lender or whoever requesting this work she said just use the email she sent me. We sold with an as is no appraisal contingency deal...we already got duped during inspection when the buyers asked for 5k for unanticipated structure damage and our broker asked us to give that in good faith so my pops gave only 2500 against my wishes oh did i mention that the buyers are also represented by the same company as us..and I noticed all the prospects they brought to us were, and when I called her on that she said that shows you who was really trying to sell your property. i need help they already came today and said they are literally going to slap paint on certain spots not paint thoroughly and Spackle a few cracks that's it! This seems not normal and I keep hearing that time and time again...really confused
0 votes Thank Flag Link Wed Aug 24, 2011
Thumbs up to Brad. He is giving you some good advice on the credit issue. Something smells of rotten fish on this one. I can't put my finger on it but i sounds like they want you out of the house for some reason. Could it be possession is 9/10 of the law or something like that ?

I don't often recommend attorneys because I think that folks rely far to heavily on them and just dish out a lot of money out of fear, panic or shear laziness because they don't want to take the time to do a little homework on their own.

I see you're in the LA area. I would suggest that you call Bill Handle "Handle On The Law" on AM 640 radio 800 521-4KFI on Saturday Morning and pose this question to him. It's absolutely free and you just may get some very interesting perspective. Just a thought.
0 votes Thank Flag Link Wed Aug 24, 2011
It seems to me that the buyers 1). REALLY want your home if they are willing to invest money in a property they do not own at present and 2). It seems the Buyers are really the ones at risk. I am awestruck that they are doing the work prior to close. I wonder if they have their agents blessing? I would be hard pressed to encourage my borrowers to put money into a property before it was in their name. And, they are willing to pay for your Hotel?

Seems to me you have golden borrowers. I am willing to bet a number of sellers and agents here on trulia would love to take them off your hands. LOL! Best of luck!
0 votes Thank Flag Link Tue Aug 23, 2011
Being outside looking in it sounds like you're being duped.

Regarding the Loan Contingency: It's not uncommon for a borrower to need more time to close, there are always unexpected kinks in the loan process that just happen & it's not necessarily anyone's fault. 7-10 days is a good extension, anything longer than that & there's a major issue with the buyer.

As is: As is means As is means $0 coming from you & going to the buyer.

Purchase Price: Not taking into consideration the $2500 you got 'duped' out of, are you getting a good price for the house? Do you feel you're selling it at the absolute Top Price possible?

Fixing things for the appraisal: What kinds of things need to be fixed? Is this a termite issue? YOU SHOULD NOT BE MOVING OUT SO THE PROPERTY CAN BE FIXED PRIOR TO CLOSING.

I would really like to assist you but I need more details about what you're being asked to fix so I can give you a more accurate answer. I'm an insomniac Realtor & am happy to help. Just shoot me an email directly. i don't look back on this same Trulia thread for answers after mine.

EmilyKnell1@yahoo.com
562-430-3053 c
Realtor Since 1996
Main Street Realtors
Problem Solver
0 votes Thank Flag Link Tue Aug 23, 2011
Fha requires that a home be in a certain condition and they must be fixed. Usually the seller pays for it but if the buyer is willing to pay for the work to be done and is willing to put you in a hotwl that shows good faith on them. Remember they are putting money out of pocket for a home they don't even know. They also have much to lose. This could require an extension from the lender cause they need to make repais and the appraiser needs to go back out and verify the work has been done. I hope this puts you at peace.
0 votes Thank Flag Link Tue Aug 23, 2011
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2016 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer