Home Buying in 85224>Question Details

JSal88, Both Buyer and Seller in 85283

Short Sale and asking sellers to fix the roof...

Asked by JSal88, 85283 Wed Jun 22, 2011

My short sale offer was finally accepted by both banks Home inspection done, The roof looked questionable so I had a seperate roof inspection. The roof came back as having 2-2.5 years left on it. The roofer advised there is major hail damage from the AZ October hail storm of 2010. He advised us to contact the sellers and ask them to file a claim on their homeowners. We did, and they said no. Their opinion is the roof is old and the wear is from age not the hail. Anyhow, I know I am getting a deal on this house, so I really dont mind replacing the roof in 2 years at my expense. FHA inspection is Friday and I am a little concered..what if FHA wants the roof replaced? Is there anything I can do regarding having them file a claim? Not sure if home owners has a deductible as I have never owned a home,if it does can I offer to pay their deducable? I do not want to lose this house . Thanks for any info!!!

Help the community by answering this question:


Hi JSal88:

Interesting situation...my first thought is to just see what the FHA appraiser comes back with as far as needed repairs. Since you already accept the fact you may have to repair the roof in the relatively near future, you may get lucky and he/she says nothing. If it is a requirement of the FHA appraisal, it won't go away, i.e., FHA will know it is there even if another party tries to buy with FHA.

If it does come back with the roof repairs as a condition, the Sellers would then have considerable motivation to help you get it fixed.

As to the deductible, only their policy would tell us that, but I do believe almost all insurance policies have a deductible or the premiums would be sky-high, so your idea of offering to pay it may help. Remember, though, if the deal falls through you are out that money.

My advise is to try to relax until you know you have an issue.

Bill Parker, Loan Officer
AZ Lic# 09011570
NMLS #223607
CPA--Licensed, no longer practicing

Legacy Group Lending, Inc.
15333 N. Pima Road, Suite 300
Scottsdale, AZ 85260
(O) 480-993-3080; (M) 602-565-3646; (F) 480-993-3081
EM: Bill.Parker@Legacyg.com
Website: http://www.LegacyG.com

MISSION STATEMENT: To create an unbelievably enjoyable experience for my clients, while guiding them through the most important financial transactions of their personal lives. My clients know me as their Mortgage Lender for Life. I truly appreciate your referrals.

If you think it's expensive to hire a professional to do the job, wait until you hire an amateur.
Red Adair, Oil well firefighter
1 vote Thank Flag Link Wed Jun 22, 2011
In my experience, the FHA appraiser will not have a problem with the roof. It seems that the roof still have a couple of years on it. Having said that, each appraiser is different and yours may ask for the repair.

In regards to the insurance claim, that is probably a good advise. You or your REALTOR should probably do some more probing to understand why the current owners do not want to file the claim. There might be an underlying reason besides the fact that they feel the roof is old. See below some ideas on how to address their concerns:

1 - they might be concerned that if they file a claim, their rate will go up in the future. The AZ hail storm was classified as a disaster. And as such, claims should not impact owners who filed them. They will have an impact on the overall market - meaning insurance costs for everybody increased.

2 - they might be concerned with the amount of work required. Once they file the claim - and actually any repair company will get the paperwork ready on their behalf. There is very little they have to do.

And most roof repair companies are offering to pay you up to $1,000 (which should cover the deductible) if you let them put a sign on your yard advertising their services. It is a clever way of offering roof repair where the owner does not have any out-of-pocket expense.

And even if the FHA appraiser does require the roof repair, don't forget that you could try getting a FHA 203K, which is an FHA loan where they escrow funds for repairs. It will likely add time to process, but it may be an option.

And I will leave you with one last thought. Kudos for you for not being emotional about the roof issue. Many people involved in real estate transactions get overly emotional and end up ruining a good deal. If you did your analysis and feel that the house is still a good deal even considering the roof situation, you will probably be fine.

Good luck!

PS: would you let us know if the FHA appraiser does ask for the roof repair? Just curious.

Jose Dias, REALTOR
(623) 418-5700
Realty One Scottsdale
2 votes Thank Flag Link Wed Jun 22, 2011
If it shows up as an item on the appraisal and the appraiser is recommending replacement, you may not be able to get the loan without getting it fixed. Have you talked to your lender about a 203K loan? Another thought is they may have made a claim for the damage and pocketed the funds. That would not be that out of line on a short sale. Remember they're not making the payments and are probably not keeping the home up. Regards!
0 votes Thank Flag Link Sat Jun 25, 2011
Hi JSal 88,

When FHA does the appraisal and they have a problem with the roof and they feel it needs to be replaced it will need to be replaced in order for you to get the loan. If you cannot get financing through FHA you will not be able to purchase the home without the home meeting the FHA requirements.

The Bank is probably selling the home AS IS but you still had the option of having the inspections done and you can still ask to have things repaired. That of course does not mean they will repair them.

Do not pay the homeowners deductible to get the roof replaced. Also be careful about the roof issue as the homeowner may request the roof be replaced and the insurance company pays the Bank the amount for the roof repair and the roof never gets fixed.

You should talk to a real estate attorney regarding this matter so you don't lose your earnest money and the home you want to purchase. If you are using a Realtor you should have them give you names of Real Estate Attorneys that can help you in this situation.

If you are not working with a Realtor and you need additional information I can give you some attorneys names that you can talk to.

Thank you,
Cara Simmons
Sun Canyon Realty
Web Reference: http://CallCara.com
0 votes Thank Flag Link Wed Jun 22, 2011
You can not force the seller to do anything. Many sellers on short sales won't do much to help, most will not pay for anything out of their pockets or even file a claim on their insurance (even if you pay the deductible). On a short sale you are very limited in terms of your options, timelines and help you can get from the sellers - which is part of the fun of dealing with short sales! But there might be some other alternatives, depending on your other circumstances. Your agent will be able to provide you with the best course of action depending on your other factors.

Carlos J. Ramírez, PC, ABR, CNE
Associate Broker/Realtor, HomeSmart –
Certified Negotiation Expert (CNE)
0 votes Thank Flag Link Wed Jun 22, 2011

I (listing agent) had a similar situation that I closed in October, 2010 in Mesa. The buyer was getting FHA. It was a short sale and had roof damage estimated at $1,700 and also had active termite estimated at $ 500.

What I did went back to the seller's lender (If you don't ask, you get nothing but you ask there will be some returns) explained the current situation, " Buyer is getting FHA. FHA guide line requires to repair roof damage and treat the termite...etc. If I lose this buyer, I DON'T HAVE ANY BACKUPS!". They asked me to get a couple of estimates. I got extra $ 5,000 for seller's incentive except entire closing cost.

Then I wrote up an addendum that stated "if the buyer cancel this contract, the buyer will be responsible for the entire amount of $1,700 + $ 500". I had the buyer chose contractors for repair/place roof and treat termite and also had them pay the contractors through escrow. Then the seller gave the buyer the same amount credit through escrow. In this case the buyer really wanted that property.

I would recommand just wait until how FHA appraisal comes out. I don't think they would ask for replacing the roof for aging. If they do, then go back to the seller's lender to see what they say . If they aren't helping, then go with 203K.

Good Luck!

Karen McDonald, GRI
0 votes Thank Flag Link Wed Jun 22, 2011
If the roof does not meet FHA/HUD's minimum property standards, then you will have to convince the seller to repair/replace it, or switch loans to a non-FHA loan or just convert your FHA loan to a 203k, which will allow you to add the cost of repairs/improvements into your FHA loan.
0 votes Thank Flag Link Wed Jun 22, 2011
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