Trying to buy a short sale house

Asked by huggybear87124, Rancho Cucamonga, CA Sun Feb 3, 2013

I am trying to buy a short sale the house has an outer wall that does flex, a structural engineer was called in to look and gave a report the wall is not structural ( the house is post and beam) the lender came back and said it was structural, so an offer to have the owner of the house replace the wall and the lender now says that will cause a broken title! my understanding is that the owner can have the repairs made and after the final inspection from the city/county and the contractor is paid and signs a release of lean and all could go forward!

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Leigh-Jo Anzures’ answer
Leigh-Jo Anz…, Agent, Albuquerque, NM
Sun Feb 3, 2013

It sounds like it is something your lender will make the loan contingent on. The problem you may face is, since the seller is facing a short sale situation, they may not have the funds to pay for the repairs. Then, you may have a hard time finding a contractor willing to get paid at closing on a short sale.

I recommend that you contact your real estate agent regarding this matter. He/she should be your direct contact with these matters.

Best wishes on the purchase of your new home.

Syan Real Estate
Call/Text: (505) 730-8181
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Josh Barnett, Agent, Chandler, OK
Sun Feb 3, 2013
When dealing with a short sale, the lender is the one who's opinion has to be satisfied as they are the entity taking the negative on the short.

This sounds like a problem that can be worked out and should not delay your closing too long. Work with your Realtor and the lender and you will be closed before you know it.

Best of Luck
0 votes
Patrick Will…, Agent, Rio Rancho, NM
Sun Feb 3, 2013
Your question is a little confusing but I assume you mean the lender you are getting your loan through and not the seller’s lender doing the short sale.
I have seen many times where lenders require repairs that don’t always make sense. Last spring I had an REO listing that the appraiser made a note that “many homes in the area have polybutylene plumbing” and recommended a “plumbing inspection”. The buyer’s lender required us to do a re-pipe that would have cost $5000. The house didn’t have polybutylene and we got two plumbers to inspect and say so but the lender wouldn’t back down so we terminated and sold to a different buyer. (I asked the buyer’s agent to move the loan but she stood with the lender insisting we re-pipe.)
I don’t see how the seller repairing could cause a break in title. A cloud yes because of the possibility of a mechanics lien but proof of payment to the contractor and a release of lien should take care of it. Also, I don’t know how it is in CA but here in NM you can buy mechanic’s lien coverage on the title policy.
I would suggest you take the structural report to the lender and ask them to reconsider. If they won’t tell them to get the loan package ready to transfer and find a new lender. If you really want the house, and your lender won’t work with you find one that will.
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Tim Moore, Agent, Kitty Hawk, NC
Sun Feb 3, 2013
Having the repairs made and paying for the repairs is the problem as I see it. The seller is selling short so there is no money being made on the sale by them so why would they want to pay for repairs, if they even can. Will the bank, that is allowing the sale and losing money to do so, pay? My guess is they won't want to as long as the house does not belong to them so I see this as going nowhere fast. The bank might just foreclose, move the ex-owner out and then investigate when they own it.
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