is it possible to fix the house in order to qualify for a convectional loan while the house is still in escrow?????? thank you

Asked by lnsargsyan, Pasadena, CA Thu May 9, 2013

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Fri May 10, 2013
All things are negotiable my dear. In 1998 we I made offer on a house that was in bank owned. Got it accepted and the lender said they would not lend on the house in that condition. Well the lender would not let us in to fix it. So we went in at night and made the repairs and closed on the house.

Typically though these repairs are the duty of the seller. If you can not get them to do that there is a loan called a 203k loan. Not too many lenders do them, I actually do not either.

I have a friend who is pretty good at them if you want me to get you together contact me (click on my photo)
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Don Crozier, Mortgage Broker Or Lender, Campbell, CA
Tue Sep 16, 2014
You can get a FHA 203K loan. Which is a type of a construction loan.
Or, if the current home owners allow you access to the home to make repairs and you have the funds to complete them, you can extend the contract as long as needed. The lender will fund once all parties of the transaction are satisfied. (Including the final appraisal with all improvements verified by the original appraisal, with permits if applicable)
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Cameron Novak, Agent, Corona, CA
Mon Sep 15, 2014
I think a convectional loan is where the money is heated by circulating warm air around it.

I'd focus on finding a convection oven for the money before fixing anything else.
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Ruth and Per…, Agent, Los Gatos, CA
Fri Aug 8, 2014
Dear Insa..

The answer is no, here is why...

....lets say doing the fixing you cause an Accidental fire....will your Insurance pay
for an Asset that does not belong to you ....

..or will you pay for it ?

Then the seller will need an Insurance Bond , in-lieu of fire or destruction...

Good luck
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Larry Hodel, Agent, Chino Hills, CA
Fri Aug 8, 2014
All I can say is it's risky as you might run into problems with the seller, buyer, lender, etc.
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Nazar Kalayji…, Agent, Norco, CA
Thu May 9, 2013
We are in a very competitive sellers market. As a buyer, if you ask for any repairs from the seller, they will move on to another buyer. As prices go up by 5-10k a month, if I were you, with the sellers permission, I would pay to repair anything the lender calls out so you can get a loan and close on the house. Good luck!
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Joan Patters…, Agent, Rancho Cucamonga, CA
Thu May 9, 2013
I am guessing you are buying the home since you have said in order to qualify for a conventional loan. If you were my buyer, I would have the seller fix the items. If the seller will not, I certainly would not put any money into the home until I was yours. You don't know for sure if the house will close for sure. There are way too many variables and risks to do this before the house closes if you are the buyer.


Joan Patterson, B.A., G.R.I., Realtor, License #01431647
Keller Williams Realty
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Elise Timpe, Agent, Corona, CA
Thu May 9, 2013
You don't say whether you are the buyer or the seller. The answer is yes. Usually, the things that need addressing before the loan will proceed are called out by the appraiser. The seller can fix the issues, the appraiser can be called back out and the escrow will proceed.

If you are the buyer, you should never make repairs because, unknown to most people outside of the Real Estate industry, there are more things that can prevent it from closing than any of us can list. There are a myriad of liability issues for possible injuries incurred on the job while making repairs. What happens if you spend money fixing a house not owned by you and it burns down? What if the owner dies without finishing the paperwork? Earthquake? Sinkhole? The list can go on and on in various directions...

There is also a loan known as the FHA 203K. It is a loan that includes the cost to repair and the money is held in escrow until after it changes ownership and repairs are made. Your lender may have some conventional loans that are similar.
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Ron Rovtar, Agent, Boulder, CO
Thu May 9, 2013
Hi Insargsyan: As others have pointed out, it would be a very bad idea to spend money fixing someone else's home even if you expect to own it at a later date. But you should talk to a couple lenders. It may be possible to arrange a loan if you escrow money to make specific repairs after you close.
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Shanna Rogers, Agent, Murrieta, CA
Thu May 9, 2013
Hi Insargsyan,

The only person who can do repairs is the owner. If there are repairs needed for the property to qualify for your loan, have your Realtor do a Request For Repairs asking the seller to do the repairs. DO NOT pay for the repairs yourself until you own the house (it closes escrow and Title is transferred into your name). You don't want to pay for repairs before you own the house because what if for some reason, the deal doesn't close? Then you would be doing repairs on someone else's house.

Shanna Rogers
SR Realty
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Tony Grech, Mortgage Broker Or Lender, Southfield, MI
Thu May 9, 2013
Not a good idea to spend money on a home that doesn't belong to you. If the loan still doesnt close at the end of the day then you are out that money.

Plus there are probably some legal issues to worry about. Speak to your realtor or an attorney to get advice on this.

May be best to walk away.
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Ron Thomas, Agent, Fresno, CA
Thu May 9, 2013
No, it is not!
First of all, since you do not own it, you cannot insure it.
Second, since you do not own it, you cannot have constant access to it.
Third, everything in the sale is predicated on the beginning and ending condition of the property.
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