"Who Makes the Repairs When FHA Appraiser Finds Problems?"

Real Estate Agent with Alpha Global Associates

"Who Makes the Repairs When FHA Appraiser Finds Problems?"

That is the question I had to discuss recently with my client when she was selling a listing.  While this may have been an exception to the normal rules and guidelines, it did come up during the process as a result of the recent catastrophic hail storm in the Phoenix metro area this past October.Roof Replacement

During the inspection period the FHA appraiser wrote up the roof and air conditioning unit.  The listing was a bit unusual as the home was being sold by the court appointed 'designated representative' of a deceased sibling.  My client and her family did have homeowner's insurance on the property, and so the storm damage was covered by insurance.  The repairs had been scheduled and were concluded prior to close.

I am now asking for opinions about who is responsible for repairs on the huge number of bank owned properties here in the metro area.  Has any other community out there had similar catastrophic storm damage and how was it handled by banks, lenders, insurance companies, etc. in your area?

We have seen dozens of new roofing companies in the metro area.  License plates on construction vehicles are from all over the country.  And we have heard of problems with some of these companies.  They do a job, move on and then cannot be found if there are issues.  And, it can be interesting getting a 2-year roof certification if the contractor is not 'licensed' in the State of Arizona.  That could be another blog, hmmm.....

If your client is looking at a property that may need roof repairs, make certain that everyone knows the answer to the question "Who Makes the Repairs When FHA Appraiser Finds Problems?"

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Ron Marshall
Marshall Enterprises - Saint Michael, MN
Birdhouse Builder Extraordinaire

In my experience, local roofing contractors are the best bet.  There may be qualified roofers from other states, but how would you contact them later if there is a problem?

Jan 18, 2011 01:00 AM #1
Kathy Toth
Ann Arbor Market Center Keller Williams - Ann Arbor, MI
Ann Arbor Real Estate Experts - Kathy Toth Team

The FHA addendum has a limit of seller respnsible repairs.  If it is a bank owned home and the buyer bank requires the repairs, and the seller bank won't do the repairs, then the buyer has to do them before closing and this can get dicey.  The FHA inpsection on one house requires outside paint of facia board and a door.  Do you know about polar Guard paint?  Because it is winter here and we thought,k how are we supposed to paint?  Well there is a solution for everything.

Jan 18, 2011 01:03 AM #2
Glenn Roberts
Retired - Seattle, WA

I tend to agree with Kathy. The selling bank is unlikely to have insurance and they aren't likely to pony up either. Agent, hopefully are looking out for their buyers by assuring work is done by licensed companies.

Jan 18, 2011 01:34 AM #3
Ritu Desai
Samson Properties - Ashburn, VA
Virginia Realtor-Fairfax/Loudoun/PW-703-625-4949

In Virginia if you are buying home AS IS, we have a paragraphh that the buyer may be responsible to any repairs requested by the lender. I have both the situation my buyers have done repairs prior to closing and in other cases though it was a foreclosure bank agreed to pay for the repairs.

Jan 18, 2011 01:40 AM #4
Ken Speer
Alpha Global Associates - Phoenix, AZ

Ron ~ I couldn't normally agree more.  However, one local company here that does a lot of advertising was hired by me a number of years ago.  Let's just say it didn't go well.  Another company said that's why the advertise because they don't get repeat business.

Kathy ~ Dicey is a great word.  Do you think we should get the 'lenders' to be responsible as they are the ones who foreclose?  New legislation, ugh!

Glenn ~ I agree.  Agents need to be watching out for their clients on BOTH sides.

Ritu ~ I too have had some occasions where the 'bank' has paid for repairs.  What an interesting time.


Jan 18, 2011 01:49 AM #5
Paul Gapski
Berkshire Hathaway / Prudential Ca Realty - El Cajon, CA
619-504-8999,#1 Resource SD Relo

Thank you for sharing your blog; we need Real estate Professionals to share their comments and information regarding their markets and experiences. Thanks again from beautiful Sunny San Diego

Jul 22, 2012 01:17 AM #6
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