seller4571, Home Seller in Pittsburgh, PA

Can a buyer ask for 6% toward closing cost AND a credit toward a roof repair?

Asked by seller4571, Pittsburgh, PA Wed Mar 20, 2013

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Tony Thrift, Agent, Warren, PA
Tue Mar 26, 2013
As far as I know, 6% is the maximum seller assist that can be obtained. However, if the roof is a lender or FHA-required repair, it isn't considered seller assist... In that case, you may be able to get both.
1 vote
Doug Caye, Agent, Allison Park, PA
Thu Mar 21, 2013
If it is an FHA loan and the assist is maxed out at 6% then the roof repair may be payable to the contractor on the HUD. Fairly standard practice- if it is a coventional mortgage the assist will have to be 3% unless the buyer is putting over 20% down.
1 vote
Blair W. Coh…, Agent, Monroeville, PA
Wed Mar 20, 2013
If you ask for a repair credit the lender will likely require that the repair be made prior to closing instead of a credit. Any repair credit (whether the Seller is paying Buyer closing costs or not) typically may not be acceptable to the lender.

In some cases (due to inclement weather) the lender may permit an escrow of 150% of the amount of the cost to repair.

You may want to consider having the cost of the repair paid at closing. Submit an invoice from the contractor to be shown on the HUD1 settlement statement to be paid at closing.
1 vote
Denise Bruno, Agent, Canonsburg, PA
Wed Mar 20, 2013
You can only ask for one or the other. Banks do not allow credits and seller assists. Now u can ask them to fix the roof or u can have them write u out a check at closing but it can't be a credit.
1 vote
Edith Karoli…, Agent, Winnetka, IL
Wed Mar 20, 2013
not sure how the buyer is paying for the home, so I am not sure what the lender's limitations could be.
It looks to me that the buyer is not asking for a new roof just for money to repair the roof, as the seller
if it is just a repair you may want to do the repair yourself, and go from there.
I am not sure how and when the buyer is asking for closing costs.....
Usually if and when the buyer wants the Seller to pay up to 6 % of the buyer's closing costs, those
6 % will be put on top of the initially agreed upon sale price, so that the buyer basically includes the
closing costs in his mortgage, for the seller it is almost the same, he gets more for the house, but pays
the buyers part of the closing costs....
I am not sure whether you are working with a Realtor, i.e. is your home listed with a real estate Brokerage if so you should discuss this request with your listing agent..... If you are selling by owner and do not have a listing agent of your own, then you may want to talk to a real estate attorney, who can then formulate the contract in a legal fashion.... But since we here do not know what the exact situation is, what the current offer or contract says, hard to tell you.... Get advice from the professionals who can see the current offer or contract... hopefully you are within the negotiations, and
can make adjustments that will work for both sides and will be acceptable to the lender and title company.

Good Luck to you

Sincerely yours,
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1 vote
Kathy Hagger…, Agent, Washington, PA
Sun Mar 24, 2013
Hello Seller4571

No, unfortunately, there can be no more than 6% credit from the Seller to the Buyer in an FHA transaction. When the closing cost credit is already maximized at 6%, repairs will need to actually be completed instead of done through a credit. The appraiser will have to follow FHA appraisal guidelines. Any item that does not "Pass" those guidelines will have to be repaired before the loan can be approved. The appraiser will also have to go back to the house to certify that the repairs have been completed.
Hope this helps!
Thanks Eric Nichols
0 votes
Sharyn Ellio…, , Pittsburgh, PA
Thu Mar 21, 2013
You can have one or the other. If an FHA loan, the max seller assist is 6% and likely the bank will require any repairs be done prior to closing. Good Luck!
0 votes
Dan Simon, Agent, Charleston, SC
Wed Mar 20, 2013
Your agent should be able to assist with this. The max amount of closing costs allowed can vary depending on the type of loan the buyer will be using. I believe a VA loan will allow the seller to contribute 6% towards a buyer's closing costs. "Credits" for repairs, carpet allowance etc.... are not well received by most all repairs these days. Most lenders will require that required repairs are completed by the seller prior to closing.
0 votes
Vanessa Swan…, Agent, Castle Shannon, PA
Wed Mar 20, 2013
No, if you are paying for this house with a mortgage, you can not have both. The lender won't allow it. I would ask the sellers to pay for the roof themselves, not credit you.
0 votes
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