Home Buying in Syracuse>Question Details

Notjustone, Home Buyer in Syracuse, NY

Can I legally be forced into using sellers contractor when I'm trying to purchase a house?

Asked by Notjustone, Syracuse, NY Mon Jan 19, 2009

I am purchasing a foreclosure from fannie mae. The house is being sold as is. The appraiser came back and said 5 things needed to be done (scrape and paint a door, take out broken plane of glass in a window frame, put up a temp gate and inclose part of the porch until spring, and hang a couple of baseboard heaters in a mudroom where there is pluming). The sellers realitor is coming back saying that I have to use the selling brokers personal contractor and they gave me an estimate of $1800 - where my contractor said at most $500. The broker/agent will not let my contractor do the work and now is holding up the progress of trying to close. Can he legally do this (nothing in the contract stating that i have to use them) or do I have a choice as to who can do the work?

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It is not unusal in this area for Fannie Mae to require that the purchaser of foreclosed homes to pay for repairs that the buyer's bank requires to issue a mortgage. There is a considerable difference between your estimate and Fannie Mae's contractor and part of that maybe the significant insurance, bonds, and wage requirements required by Fannie Mae of its contractors. You may get the most help from your attorney and/or your mortgage originator especially if you are not utilizing a government mortgage. Good Luck!
0 votes Thank Flag Link Tue Jan 20, 2009
We have to pay for the repairs as Fannie Mae will not pay for them on the foreclosure. And yes they do own it. The estimate was WAY over the line for 3 hrs worth of work and that price was also excluding all the materials. My realtor and her broker are fighting for us - the sellers realtor is also the broker. Will touch base again. thanks all.
0 votes Thank Flag Link Mon Jan 19, 2009
Talk to your Realtor! If the seller is paying for the repairs, they can use whomever they choose to pay. However, if you are paying for the repairs, I am wondering WHY you are paying first of all, and secondly why in the world the seller's Realtor seems to believe that you should use the seller's contractor. Would we not wonder if the seller is padding the estimate and the contractor is giving back part of the money to the seller or maybe the Realtor - horrors--we certainly hope not!

Hopefully you also have a Realtor, but if not, you may need an attorney at this point. If the same Realtor is representing you and the seller, then you should insist on speaking with the managing Broker of the agency, and if you are still not satisfied, call a good attorney.

Does Fannie Mae actually own the house, or is this a pre-foreclosure? If it is indeed Fannie Mae, then you need legal advice about how to proceed. You may have to use a Fannie Mae approved contractor if you are using a Fannie Mae mortgage because they want to be sure that the work is completed appropriately to retain the value of the home they are loaning you money to buy. At the very least, you should be able to get a couple of quotes from several different contractors approved by Fannie Mae. I will be very curious to find out what happens. Please let us know.
0 votes Thank Flag Link Mon Jan 19, 2009
More than likely best use their contractor you dont own the home seller have no relationship with your contractor. You can have an inspection after work completion
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0 votes Thank Flag Link Mon Jan 19, 2009

Get your agent on this! I'm assuming the reason you are getting this work done during escrow is because you can't close your loan without the repairs? There is NO reason why you should put any money into a home that doesn't belong to you yet, it's a risk. If the repairs must be done prior to the close, then have the seller pay for it and you can reimburse them at the close, or have the money come from escrow. But if the deal falls through, make sure they don't charge you....you are not obligated to fix up a home for the bank.

If they are requiring you to pay at all....insist that you pick the contractor.

Your agent should play hardball.....force the issue!!! They want the deal!

0 votes Thank Flag Link Mon Jan 19, 2009
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