$500 repair cost for carpet. What happens to this $500.00?

Asked by Privacy, Little Rock, AR Fri Jan 9, 2009

I purchased a home using a 203K loan. The buyer agreed to $500 for new carpet, but the carpet is included in the repair costs (203k loan). What happens to this $500? Can it be used for other repairs in the home? Does it go in escrow? Do I recieve as cash? Is it lost?

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GLORIA QUEZA…, , Little Rock, AR
Tue Sep 22, 2009
It all depends how you got from the written contract to the closing. Did you know from the start that you were getting a 203K loan? Did you negotiated this loan after the contract was accepted and found out about more extensive repairs? Sometimes the renegotiation on contracts with these big changes allow for changes on any allowance that were in the original contract. If there are agents involved they should have explained the changes in the contracts, if there are no agents involved then everything ends between buyer and seller. You cannot receive cash, if the seller still agreed to this carpet allowance you can get your estimate for carpet and take it to the seller to pay the $500.00. Good Luck.
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Bill Eckler, Agent, Venice, FL
Fri Jan 9, 2009

Have you closed on this property? If so, check the HUD to see if the repair money was included. It may ave been figured into the closing where you were given the credit in this manner and it was deducted from the sale price.

Ask your agent for an explanation.
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William Rudge, Agent, Boiling Springs, PA
Fri Jan 9, 2009
It depends on how your sales agreement was written. If the $500 was shown on your settlement sheet simply as a credit towards the purchase price it was built into your loan settlement costs and you have no access to it. If the money is being held in escrow then the cash can be used towards the purchase of new carpeting.
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