I have a contract signed with Freddie Mac, the home appraised for approx. 7k more than the offer price which was a net 2k over the listed price on

Asked by Breth160, Orlando, FL Sat Jul 10, 2010

MLS, the appraisal/underwriters have stated the following must be done prior to closing: HVAC system was not sufficiently cooling the home, therefore inspection/repair is required, the pool currently is drained and the pool must be inspected/repaired, and a comestic piece of trim must be repaired on the backsplash. This is FHA appraisal, what is the likeihood of Freddie Mac agreeing to do the repairs in order to close. I would be willing to do get the repairs done myself prior to closing, but the contract says I cannot. Anyone have experience with this type of issue? Thanks in advance

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Breth160, Home Buyer, Orlando, FL
Tue Jul 13, 2010
Just to let you all know since you took the time to answer and may have customers in the same situation, much to my surprise, Freddie Mac agreed to do all repairs in writing and repairs are underway as we speak. The thought process as to why the repairs were approved is they received 4 offers on this property, mine was the highest and all were FHA, so the repairs would have been an issue for anyone with FHA financing Anyway I am pretty excited and looking forward to a closing next week.

Thanks again for your replies
2 votes
Mark LeMenag…, Agent, Lake Nona Orlando, FL
Sun Oct 7, 2012
A great example of how Fannie and Freddie will do whatever it takes to get owner occupants in properties.
0 votes
Alma Kee, Agent, Tampa, FL
Wed Oct 3, 2012
Congratulations! Thanks for sharing your good news.

All the best,
Alma Kee
http://www.SoldOnTampa.com
0 votes
tdinie, Home Buyer, Columbus, OH
Tue Oct 2, 2012
Thanks for the update Breth. I'm going through a similar situation. Our offer was accepted and then we had an inspection. The wiring throughout the house is all mismatched and not grounded, plus the outside wiring to the meter is completely exposed. Also, the roof is 10 years older than Freddie Mac's inspector said it was. We knew that there were termites in an old rotten shed, but we would also have to take down all of the wood paneling in the Florida room and put up drywall (basement, too). BTW, we can see that whoever did the termite treatment did a good job. They drilled right thru the concrete surrounding the house every 12". The house was originally listed at 89K, then the cut it to 79K. We offered 75K and it was accepted. After the inspection, we told them we would pay 68K.
Freddie Mac said that they would inspect it and let us know if they are going to fix the electrical or accept our new offer. It's been a month and 2 days and we've heard nothing at all. We have already made plans to rent our current house in less than 4 weeks, since that was supposed to be our closing date (which was about a month more than we thought we needed).
Up until the inspection, everything was going very smoothly. I wish they had a website where you could see where you stand in their process.
0 votes
Judi Monday,…, Agent, Green Valley, AZ
Mon Jul 12, 2010
It is worth a try but I wouldn't put much hope in Freddie Mac agreeing to the repairs. Ask your agent to get the addendum together and submitted ASAP.
0 votes
I think your answer isn't that great, because if it is a FHA/VA loan, don't you run the risk of not getting the loan from the lender?
Flag Fri Jul 17, 2015
ron todd ba…, Agent, altimonte, FL
Mon Jul 12, 2010
Usually you won't get Freddie Mac or any bank to pay for repairs. FHA203K loan would be great but if your running low on time now you may want to double check a few things just to make sure. Get an inspection or second quote on the both the pool and The HVAC.

Just remember what an Inspector tells you and a contractor are 2 different things. Then get at least 2 bids on the repairs to compare prices. That will help you see the real prices for yourself.
Just like stated below the AC may only need freon which may cost about $35 a pound (possibly $200) which may not be too bad. Then again what if you need a whole new system? That could cost up to $5000 depending on the size of the unit. Just get a good over all Inspection to be SAFE and have Piece of mind.

Also the pool you will want to get water in right away as they can Float up and cause a lot of damage and extra expense. Good look and just make sure and do your du diligence.
Web Reference:  http://Flstopforeclosure.com
0 votes
Scott Godzyk, Agent, Manchester, NH
Sat Jul 10, 2010
You will need to send an addendum to the listing agent to submit to freddie mac, include a copy of the appraisal report and estimates from a contractor on their letterhead, ask them to either make the repairs or allow you to have the repairs made and credit you for the work.

It is common for this to happen, unfortanately the listing agent and the buyer agent should have had things inspected prior to the appraiser so they could have had it taken care of before the appraiser did his job.
Web Reference:  http://www.ScottellsNH.com
0 votes
Breth160, Home Buyer, Orlando, FL
Sat Jul 10, 2010
Well I really do like the home and my current lease runs out July 31, so I am about out of time, Freddie Mac is providing the 2 year home warranty and the HVAC is working it is just got cooling enough, this course could be a major or minor problem, but in my opionion if if the system needs to be replaced I would still purchase the home, the pool was fine (although black, but everthing thing ran fine before the listing agent had the pool drained for some reason and the piece of trim just needs glued back down.

My lender is from outside the state of Florida and does not do 203k, and the repairs would not cost more than 3k and thats if everything needed to be replaced, everything is ready to close with exception to these repairs, my mortgage is approved, title work is done, survery done, we could close tomorrow if these 3 items were done.
0 votes
Sharon Molnar, , Jacksonville, FL
Sat Jul 10, 2010
Unfortunately, this is happening quite frequently. Freddic Mac, will not, in my experience do the repairs for you. It is possible to have an addendum to the contract that will allow you to do the repairs. Naturally Freddie Mac and you the buyer will have to agree to this in writing.

But, here is the BUYER BEWARE warning. It is possible that you can do the repairs and for some unknown reason, you are not the one whom purchases the property. Then what... you won't get the money back.

So, my question to you is... how far are you in the mortgage process? Has everything been done and the underwriters have signed off on everything except for the appraisal? Will your lender allow you to do this? Will it hurt your loan if you spend this money fixing the required items? How much do you Love this home?
Speak with your lender. Is this a regular FHA Loan? Is it possible to turn it into an FHA203K loan? FHA 203K is where you can add the cost of repairs to the loan, the repairs are done prior to closing and everyone is happy.

Sharon
0 votes
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