Wednesday, July 22, 2009

Sacramento + Short Sale + Erin Attardi + Termites = LENDER PAID REPAIRS!

If you follow me on Twitter, you probably already saw that earlier this week I received written confirmation that a short sale lender agreed to absorb $9,110 in repairs on one of my listings.

Generally speaking, Sacramento short sales are sold "as-is" in their current condition...however some short sale lenders will agree to pay for 'catastrophic' repairs. In this instance there were nearly $6k in termite repairs, and $3k in "health and safety" repairs that were required by the buyer's lender to obtain an FHA loan.

From the begining, I had shared with the short sale negotiator that I felt this particular home would not be up to FHA lending standards. When we received an offer from a buyer using an FHA loan, I submitted it to the short sale negotiator along with color photos of the home and explicitly told her that this home would require repairs to be on par with FHA standards. A couple weeks into the transaction, after the buyer had completed pest and home inspections, and once the appraisal was complete - they submitted a request for repairs. I then spent the next couple days obtaining bids for the work that was requested...I compiled a very comprehensive report for the short sale negotiator. After less than one week - the short sale lender approved to pay for the repairs!

I should caution you - NOT all lenders will entertain paying for repairs...and not all short sale listing agents will know how to negotiate this either.

As a buyer, you should prepare to purchase a short sale as-is.

Once you obtain inspections, if you discover a 'catastrophic' issue - like pest repairs in excess of $5k, a roof that must be replaced, central heat & air that is broken beyond reasonable repair, a missing electrical panel, etc. - you may be able to make a case for a price reduction or ask the short sale lender to pay for repairs. Keep in mind there is no guarantee they will grant your request. Short sale lenders will absolutely not pay for any repairs that are not 'catastrophic' in nature.

1 comment:

CoachingByPeter said...

Learning about real estate also involves knowing what areas are going for and being able to calculate what a property is worth. This comes from years of knowledge and you can add this valuable tool to your arsenal by doing research. You should try to view as many properties as you can and start learning how to judge there worth.