bank owned "as is"...will they give you carpet allowance?

Asked by Lynn, Hanford, CA Mon Jan 19, 2009

we just had our inspection on a bank owned home. we have an fha loan ready to go. the contract says "as is" on the house. will the bank consider carpet allowance or is it a moot point?

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Ron Thomas, Agent, Fresno, CA
Thu Dec 1, 2011
All FHA is concerned with is HEALTH and SAFETY.
Carpet is neither.
All the Bank is concerned with is AS-IS,
They ask us, "What part of AS-IS do you not understand?

Supposedly, the CONDITION of the house is taken into consideration in the pricing.

Good luck and may God bless
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Robin Jerome…, Agent, Hanford, CA
Thu Dec 1, 2011
when you say inspection, I am assuming you mean the home inspection? Usually the as-is will stand unless the appraiser calls for new flooring. If your appraisal has been done and the carpet was in sufficient condition to meet that criteria, then it is unlikely they will provide an allowance at this point.
You can ask if the carpet is unsalvageable, but be prepared if they say no.
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Michael Ford, Agent,
Mon Jan 19, 2009
you need to differentiate between allowances and demands for repairs. most REO sellers are not able to deal with the laundry lists and deny all repairs. they're just not set up to operate on that basis.

that said you may get allowances granted as they do not require the bank to do anything more than agree to them.

the FHA has gotten FAR more accommodating in their demands as regard property condition in the recent years. there was a time when an FHA deal was certain torment. the deals they fund are way easier today
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Steven Ornel…, Agent, Fremont, CA
Mon Jan 19, 2009
Hi Lynn, FHA loans allow up to a 6% Seller Credit. Typically, any seller credit is asked for during the offer process after an initial walk-thru of the property has taken place to adjust price. The best opportunity for adjusting price for the condition of the carpet may have passed, depending on the contract you signed and your contingency periods. Since the worst that can happen is being told "no", I would ask for the credit.

No matter what the answer comes back as, FHA loans also require that any health & safety issues be corrected as a condition of final loan approval. I would concentrate your focus on your property inspection report looking for health and safety issues, which are much more important. Perhaps, if health and Safety issues are found, you may be able to bundle in some money for the carpet as well if the first answer was no.

Best of luck, -Steve
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Nenette Bett…, , Hanford, CA
Mon Jan 19, 2009
You could ask but they did tell you as is. What the banks like to see is when you ask for repairs to ask for them up front in a dollar amount. If this is something that the appraiser called for than one, your agent should have know that it would have been called. Secound if it was called for then you'll have to repair or replace the carpet before the loan will go thought.
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Dallas Texas, Agent, Dallas, TN
Mon Jan 19, 2009
Banks want strictly clean simple contract without repairs, and etc. you can request via amendment more than likely declined.
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