Seller Credits: When? How Much? Do They Slow Down Transactions?

Many buyers get credits for closing costs in lieu of credits for repairs, as most people know. If credits are for repairs, underwriters will require that they be completed prior to close which could cause delays. As such, it’s easiest on the lending side for the credit to be referenced on a simple RPA addendum […]Read More

Motorcycle Falls Off Wall; Fixing Houses; Appraisal Fails

When I was in college my roommate and I hung a motorcycle on a wall b/c we loved motorcycles and b/c we thought it was “artful” and amusing. My two roommates who didn’t love motorcycles found it neither artful nor amusing, particularly when the wall started to sag. And sure enough, after a month or […]Read More

Escrow Holdbacks/Post Closing Repairs OK At Some Lenders

We recently had a transaction with an entire bathroom incomplete and under construction. Our investor funded the deal before the work was done with the following conditions in place: (1) the home had another working bathroom; (2) there were no health and safety issues (exposed wiring, open pipes, etc.); and (3) 1.5 x the estimate […]Read More

Missing Floor Coverings & Issues In Foreclosed Property

We have a borrower trying to buy a foreclosure with condition issues that include missing floor coverings, missing cabinet doors, and a missing stove. Whether or not repairs have to be made prior to close has to do with: (1) are the issues “health and safety” related; and (2) is a “built in” item missing. […]Read More

Contract Adjustments – Price Increase Not OK; Decrease OK; Repairs?

We are often asked about purchase contract changes after our borrowers are in contract and after the appraisal is done. This is especially the case after inspections are done and unexpectedly large repair-needs surface. A price reduction is always OK. Lenders and appraisers will have no issues. We just had a transaction where the buyers […]Read More

Financing a Home in Need of $25,000 of Repairs? 203k; HomePath; JVM Lending

We were recently asked if we could finance a property with $25,000 of repairs. This comes up often, so we thought we would repeat some guidelines for properties with major repair issues. 1. If major repair-needs are “disclosed” anywhere, including in the purchase contract, the MLS info or the inspection reports, the work will have […]Read More

REOs With Repair Needs? Options?

We frequently get purchases involving REO properties with conspicuous condition problems that appraisers cannot help but notice (and call out). When underwriters call for repairs to an REO, the bank/seller invariably refuses to do the work. This leaves three options, if the buyers still wants to close: (1) switch to a hard money or portfolio […]Read More

Appraiser Calls Out Repairs – Often Not That Serious

Appraisers frequently call out repairs of all kinds, and for some reason it has been happening more often lately. Examples include: (1) a rickety outside stairway that was a “health and safety” concern; (2) un-strapped water heaters; (3) peeling paint; (4) broken windows; (5) excess debris around the house; (6) broken roof tiles; (7) broken […]Read More