Home Selling in Texas>Question Details

ALB, Home Seller in Texas

Under what circumstances would a residential property not get Property Approval or not satisfy the lenders'

Asked by ALB, Texas Mon Dec 22, 2008

underwriting requirements for the loan?

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The home must meet appraisal criteria first. That means the value must be high enough to cover the amount of the loan.
Other criteria are that the house must be suitable for occupancy. You can't buy a house that has major repair work needed, unless you get a larger loan with an escrow repair or have cash to repair it and the lender consents to that.
The property must be insurable and not something built in an area that geographically might jeopardize the property.
The house must not be in a flood zone that cannot be covered by flood insurance.
The house must be have a certificate of occupancy and be zoned for residential purposes. You can't buy a house to live in that is zoned for commercial use.
These are the obvious ones, but other matters can interfere in a purchase.
Web Reference: http://www.Mortgages-TX.com
1 vote Thank Flag Link Mon Dec 22, 2008
ALB
This question sounds like a buyer or their Realtor is telling you that they cannot purchase your property for the above reason.

I do not know the market in your area, so let's just say that on average, most housing markets have declining values right now. Appraisers and underwriters are under the gun to make sure that their work is squeaky clean, some having a property appraisal not meet the sale price simply means that the property is not worth the sale price.

There is no law that prevents people from paying too much for property. However, banks will NOT lend more than the appraised value. So if you need to sell, ask some questions of the buyer or their Realtor so you can figure out how to get your home sold.

It sounds to me that you are probably selling without professional representation, so if this is the case. do you think asking a bunch of professionals who know nothing about your property or this transaction can really provide you with competent help?
0 votes Thank Flag Link Fri Dec 26, 2008
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
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I am a Dallas realtor, and Dallas home loan officer.

If the home is not in move in quality an appraiser will note that on report published furnished to bank. If house has roof or foundation issues are only a few issues lender could deny approval for loan. Keep in mind bank wants to loan you money however they are also at risk. If a bank declines a loan you should take that a strong statement to you reconsider not purchasing that property.
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Thu Dec 25, 2008
Lots of reasons....
Appraisal is one....
Perhaps not built to code or with approvals....for example enclosed garage without permit or built over the building line on the survey.
Uninsurable
Unseasonsed homes in some cases.....bank might not finance a flip.
Owner Occupancy Rules for Condos
0 votes Thank Flag Link Tue Dec 23, 2008
Bruce Lynn, Real Estate Pro in Coppell, TX
MVP'08
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