Buyers Agent Asking For Lender to Make Repairs

OK.  This is a first for me.  I have an offer on one of my listings where the buyer's agent has written into the contract that the lender is to repair missing roof trim and any issues that may arise in the home inspection!  Geesh!  

Anyway, I explained to the agent that the lender is not a party to the contract, the house conveys "as is" etc. but she wants to keep that verbiage in because it will help justify her offer. I'm going to take it out.

Any thoughts?

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Permalink Reply by Bryant Tutas on October 11, 2011 at 12:10am

Never going to happen. The verbiage needs to be removed form the counter as it will cause problems later by setting unrealistic expectations. Now they can certainly provide photos of the needed repairs and adjust the price of the property accordingly. Glad to see you are removing. If it kills the deal then so be it. There are more buyers out there.

Permalink Reply by Deb Orth on October 11, 2011 at 12:42am

Exactly my point, Bryant.  I told her that the bank is not party to the contract so that verbiage doesn't belong in there and if we left it in, it would tie up the property only for it to be kicked out by the lender later.  In the meantime, with the house off the market, we could lose other contracts with no such contingencies.  She claims that "in her experience" the lender will make repairs needed for FHA financing and most times will include the home warranty.  What????  Not a chance!!!

Now, the scary part is that she is a CDPE.  I am too, but I have successfully listed and negotiated many short sales over the past 3 years.  As far as I can tell, she has never listed or negotiated a short sale for a seller but, of course, she thinks she knows what she is talking about.  

Permalink Reply by Jeff Payne on October 11, 2011 at 1:31am

Deb, simply remove it, have the seller initial the change and send it back to the buyers agent.  Would be interesting to ask her to prove that the lender made repairs in the past :) 

Permalink Reply by Kimberley Kelly on October 11, 2011 at 3:02am

Ha-ha to Lenders making repairs..maybe she's confused with REO's???? 

Permalink Reply by Bryant Tutas on October 15, 2011 at 11:52pm

xx

Permalink Reply by Rodney Mason on October 16, 2011 at 1:52am

Short sale or not, the property will still have to meet minimum property standards at the time of closing.  If the appraiser calls out a roof or any other required repair, then the transaction cannot close until it has been taken care of.  The buyer's agent should have made the repair request of the seller and not the seller's lender.  While the seller must obtain lender approval to close, the seller is still the owner of record.

Permalink Reply by William F Griffin Jr on October 16, 2011 at 2:57am

The buyer needs to make the repair , and they will if they really want the property. Or just move on to another property.

Permalink Reply by Jill P on October 16, 2011 at 3:03am

And this is exactly why investor cash offers come in low.   Cash investors can and will take the property "as is", which is not always going to meet minimum lender requirements for a conventional loan.  

 

Then the bank yells and screams that they are getting ripped off because the investor fixes up the house, makes it financiable, works within a time frame that allows a conventional buyer to actually qualify and fund a loan, and make a  little profit.    

 

Somehow the bank considers it's short sales to be as desirable as a conventional sale, although, in numerous and very significant ways, they simply are not.  

Permalink Reply by Jill P on October 16, 2011 at 2:59am

What do you mean "I'm going to take it out"?  

 

You can't change their offer (I had an agent once remove an addendum that was included in the contract... bad bad bad).   You can wait for the bank to reject the idea and then write your HUD accordingly.   Legally and ethically, you have to go through the proper channels regardless.  

Permalink Reply by William F Griffin Jr on October 16, 2011 at 3:04am

I dont think he means white out the verbage.  I get verbage like that all the time on an offer and I put one line through it and have the sellers initial.  Then send it back to the other agent to present to the buyers.

Permalink Reply by Dennis Smith on October 16, 2011 at 3:01am

Roof trim is normally a minor issue.  If she wants other issues found on the inspection to be repaired, have her do the inspection before the offer is submitted to the bank and add the repair costs as a credit to buyers closing costs.

Permalink Reply by Sherry Pyszczynski on October 16, 2011 at 3:57am

I would not accept the PA at all. As the listing agent, you can counsel your client not to sign it.

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