HELP, The A/C units were stolen.....

I have a B of A, FHA short Sale.  The seller is out of the country and the house is vacant.  I noticed that around the middle of December the 2 A/C units had been stolen.  The seller has maintained his home owners insurance so we called and filed a claim.  We also filed a police report.  Seems that this is happening a lot in this particular area lately. 

 

Just found out yesterday that the insurance company denied the claim because of a provision in the policy about theft or vandelism while the property is vacant.  The property is under contract waiting Short Sale approval with a buyer that is getting a USDA loan.  So just like FHA the A/C will have to be operational at the close of escrow.  The seller does not have the money to fix it out of pocket.

 

Has anybody had any experiance with something similar?  Any suggestions.  I know I will have to call the bank on Monday and make them aware of the situation.

 

Looking for ANY feedback, suggestions, comments.

 

Thanks

 

Deb Nichols

HomeSmart

Phoenix Arizona

Views: 411

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Permalink Reply by Debora Nichols on January 5, 2013 at 7:09am

Thanks Patricia,This is a lower priced property.  The buyer was already under contract when the theft occured.  The buyer had to go over list price in order to bring the net proceeds up to the approved net amount.

Permalink Reply by Debora Nichols on January 5, 2013 at 12:28pm

I don't know Patricia.  This is FHA and they are deep in their rules/guidelines.  I was hoping somebody might have delt with something similar and would have some ideas.  I guess I will see what happens next week.

Thanks

Permalink Reply by Bryant Tutas on January 6, 2013 at 3:58am

I would see if the buyer can switch over to a FHA 203k rehab loan. They could then finance in any needed repairs and improvements. These are great loans for distressed properties.

Permalink Reply by Janis Schade on January 6, 2013 at 6:18am
  1. FHA 203K's are used a lot in Missouri.  We suffer from Copper Thieves.  One thing I have had to do in the past was to get an estimate for the copper and/or AC replacement to see if we can get a reduction in the offer.  After all, it will be a problem with a new buyer if the contract offer buyer walks.  You always have to look at whether the appraised value after repair makes the home a great deal, even with a traditional buyer.

 

Permalink Reply by Debora Nichols on January 7, 2013 at 3:26am

Thank Janis.  I will be calling the bank today.  I hope they will allow for a price reduction.  I am trying to get two estimates to substantiate the price reduction.

Permalink Reply by Debora Nichols on January 7, 2013 at 3:25am

Thanks Bryant, that will something we will look into this week.

Permalink Reply by Bill Sloss on January 6, 2013 at 9:34am

This may sound strange but did you see the denial and the coverage in black and white? Frequently an insurance company makes a quick denial because its easy. Id get that first and then start with the owners insurance agent. Sometimes they can get things covered especially if they know the owner or want continued business. Then Id check with the police and see if there is a county victims advocate. Finally Id start looking for used units. You might swing the deal quoting used units

Permalink Reply by Debora Nichols on January 7, 2013 at 3:29am

Thank Bill,  I did get a copy of the denial letter and coverage.  The seller is out of the country and does not have a relationship with the insurance agent.  I didn't think about used units.  But I do have to wonder where they would come from and if they had been stolen from someone else.

Permalink Reply by Bill Sloss on January 7, 2013 at 3:45am

Do you know what SEER is? Its a Federal energy standard. There are tax credits for upgrading. When people upgrade the old standard was like 10 its 13 now but there are 23 SEER on the market. The old units have to go somewhere. Id check around. But if you have to spend the money make sure you get what the standard is now so you wont have any FHA troubles.

Permalink Reply by Wayne Brooks on January 7, 2013 at 4:20am

230k's are great for major rehabs, but the fees/costs might get a little steep for such a small amount such as A/C.  It's not easy, but if the seller's lender won't do the repair/replacement they'll b stuck with only cash offers from here out.  It's not like the banks/asset managers pay their vendors within 2 weeks any way, so they wouldn't actually be out of pocket any monies if they replaced it, and costs came out of the closing.

Permalink Reply by Bill Sloss on January 7, 2013 at 5:10am

A/C = Heat pump. Brooks was crying for you yesterday

Permalink Reply by William F Griffin Jr on January 7, 2013 at 7:40am

Bryant suggestion of 203K loan is a good way to go. Have a new or used AC installed while the house is vacant and when they go to do a walk through it will be gone again.

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