Paperwork continues apace, I guess. Apparently Wells Fargo (our lender) misplaced the appraisal and didn’t think they’d ever received it. So they haven’t been working on it at all until today when Ruby, our mortgage broker, sent them a new copy and they simultaneously discovered the old copy.
Even though we haven’t heard back from the underwriters there yet (obviously), Ruby said in her email that she was sure that the “hazards” would have to be repaired.
Yes, I know they’ll have to be repaired. It would be really nice if we could get a straight answer from somebody about:
- who has to do the repairs — can we do them ourselves or do we have to hire an independent contractor?
- what exactly do they expect us to do? Because I’m damned if I’m going to both pull the rotting plywood cover off the basement stairs and build a mini-porch for the door cut into the wall directly above them.
- do the repairs need to be “like new” or will a patch sufficient that nobody falls and breaks their neck be enough?
- how do we prove that the repairs are done? Do we need to schedule another appraisal, or will photos of the work be sufficient?
I’m really tired of hearing over and over, “oh, there will probably have to be repairs done” without anybody ever actually, y’know, conveying any information.
#1 by Roberta on August 19, 2009 - 8:27 pm
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Some of the nitty gritty is going to vary depending on your underwriter and your appraiser, but as a lender I can give you straight answers on some of this stuff:
-If the repairs are being done prior to closing, and the appraiser hasn’t specifically called out something that needs an expert (like an engineer’s report on the foundation or roof), it doesn’t matter who does the work. It just has to be done in a satisfactory manner when the final inspection is done.
-You can probably contact the appraiser directly to find out what he/she would want to see done in order to clear the “Subject To” items. There should be a contact number on your appraisal report. Some appraisers are really nice and helpful about this, some are jerks; but ultimately they’re the one who has to sign the items off as completed so they’re the one to ask about what would be satisfactory.
-When the repairs are done, the appraiser will be called out again to do a final inspection. It’s not a whole new appraisal – usually costs about $75. As long as everything is done satisfactorily, they’ll add an addendum to your appraisal report that documents the repairs and amend the value to “As Is.”
-The usual line on the quality of repairs is that they must be done, “in a workmanlike manner,” or, “consistent with the overall style and quality of the home.” Again, it’s at the appraiser’s discretion whether to sign off or not, but something totally slapdash probably won’t fly.
Hope that helps a little.
Good luck!
#2 by Pax on August 19, 2009 - 10:59 pm
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It can depend on what sort of loan you are getting. Is it an FHA?
With government backed loans such as FHA, they have a criteria list of required things that *must* be met prior to approving the loan. Basicly, it’s designed so that the house must be liveable at sale.
They generally don’t care who does the repairs, as long as they are done, and following code requirements. Done before they will approve the loan.
So depending on what needs to be done, you may be able to get away with doing it yourself. You may have to hire a professional. The seller may have to do it.
Ask your agent, and if possible, the person that did the property inspection.
Oh, and sometimes repair costs can be rolled into the loan amount during escrow. (Although, I don’t know how easy that is to do any longer.)
Ilsa and I went through a bit of this when we bought our house. There was some dry-rot near the back door, and some water damage in the bathroom flooring. FHA required that the floors be in good comdition, so the floors had to be repaired.
Rather that have the sale fall apart, we agreed to split the cost with the seller and then had our portion of the repair cost rolled into the overall loan. Slightly traumatic experience, but it all worked out.
The other thing that we had trouble with, but where eventually able to get away with was the hard wood floors. FHA requires that they be covered and in good condition. No bare wood. The floors had not been redone in a while, and varnish and paint had worn away in quite a few spaces. We convinced them to let that slide as we planned to refinish all the floors and repaint all the walls in the very near future. They almost didn’t let us get away with it.
So, talk to your agent and try and find out if the sale is contingent on these repairs.
Sorry for all the turmoil. Stay strong. 🙂
#3 by Susan on August 20, 2009 - 9:35 am
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It’s a little late to be bringing this up (I only learned of it now though), but did you ever look into this program? Also, maybe there’s a state or community development program that would help you finance the renovation?
My guess would be that the bank would want to send out their own property inspector to assess the house. The necessary repairs would be major structural ones, like if the roof leaks, are the pipes in working order, etc. rather than more aesthetic ones. I think as long as it is safe it won’t matter what it looks like (unless there’s a homeowner’s association or city code being violated) or who repairs it.
Homeowners insurance will be another consideration to consider with the repairs too. That might influence the priorities of the repairs.
I hope they give you answers soon!