Mortgage and Lending with Homestar Financial Corp

I agree roof issues better be address before the listing is even taken especially if the property is a candidate for FHA financing.  Not only will the inspector catch an old roof, the appraiser will point out every rotton facia board and bit of peeling paint that will be required to be fixed. 

Original content by Lenn Harley 303829;0225082372

Inspired by Elliott S. Topkins, Massachusetts Real Estate and Title Attorney in his post to ActiveRain this a.m.,

Fighting Back!!!!--Some tricks of the Trade which may help your Mortgage Loan proceed through the system at less than a snail's pace

Mr. Topkins makes two recommendations: 

Item #1 is just common sense with one exception detailed below. 

Item #2, on the other hand, suggests that Realtors subsidize the buyer or seller in the processing of the Contract of Sale. 


"Never, ever put repair items in the body of the Purchase and Sale Agreement."  GOOD ADVICE IN MY OPINION.  Few things add to the risk of the failure of a Contract of Sale more than including repair items to the body of an offer.  Home Inspection matters are best dealt with through a Home Inspection Contingencywhere the buyer has the option of requesting and negotiating repair matters OR declaring thHome Inspectore contract null and void. 

One of the few exceptions to this rule would be items that are clearly not dealt with effectively through a Home Inspection Contingency such as an aged roof.  Home Inspections deal generally with repairs and not replacement.  So, if one is considering buying a home with a roof that is clearly beyond the normal life of a roof, but doesn't leak, the home inspection may not offer any relief to the buyer.  The roof doesn't leak but the buyer is going to be faced with replacement costs for a new roof soon after taking possession of the house.   How often have buyers received a home inspection report that states that the roof is "beyond it's expected life and should be replaced"?  Quite often, and most buyers would then proceed to request that the seller replace the roof.  WAIT A MINUTE!  says the seller. . .  "The roof doesn't leak and therefore is performing as intended, stopping rain from coming into the house". 

AH HA!  That's when many buyers and buyer's agents have an "Ah ha" moment.  

If the buyer is not in a financial condition to pay for a new roof within the first few years of occupancy, we will make a new roof a condition of the Contract of Sale.   Experienced Buyers' Agents and many buyers know when a roof is in need of replacement.  Just look at the dang thing and if the roofing tiles are thick and curled, torn, many missing, multiple layers, missing flashing, stained ceilings from prior leaks, etc., etc.  If the house is in a "Property Condition Disclosure" state, the disclosure will ask (1) the age of the house, and (2) the age of the roof.  My good friend, Mr. Common Sense, says that if you have a 25 year old house and a 25 year old roof, then it's time to replace the roof.  Of course, I fully expect home inspectors to take offense and suggest that agents are over their head in making visual observations of roofs.  I say, that's my job.  If an agent doesn't feel comfortable observing a roof for condition and reading the disclosure statement, they can get their broker to help or the prospective buyer can get the help of a friend or relative.  The bottom line is, waiting for a home inspector to do a visual inspection of a roof is an expense and the buyer's money may be better used on another property inspection where the roof is not in need of replacement. 

Don't let roof replacement reach the home inspection period.  The home inspector knows that the roof needs to be replaced.  The seller knows that the roof needs to be replaced.  The buyer knows that the roof needs to be replaced.  Just make roof replacement a condition of the offer and if the seller is unwilling to replace the roof, the buyer will know up front and not enter into a contract where he has to pay for a home inspection that may not support replacement of the roof.


Since Condominium Questionnaires are often required by many lenders in the processing of a real estate Contract of Sale, if the buyer or seller refuses to pay the condominium association, "that the Realtors pay it if the Seller or the Buyer does not".

Just to make sure readers saw that:

"that the Realtors pay it if the Seller or the Buyer does not".

"that the Realtors pay it if the Seller or the Buyer does not".

"that the Realtors pay it if the Seller or the Buyer does not".

WHAT??  Realtors should pay it??   I'M FIGHTING BACK Realtors should NOT be expected to subsidize a real estate transaction.

NO SETTLEMENT = NO REAL ESTATE COMMISSION and THERE IS NO MONEY!  Doesn't anyone understand that Realtors work on a contingency fee basis??   Until the purchase of the sale closes and the buyer pays for the house with a combination of cash and loan proceeds, the Realtor has NO MONEY.  We invest our time and money in previewing, interviewing, qualifying, showing (who pays for the gas?), negotiating a contract, etc.

If we are successful, the buyer and seller accept a Contract of Sale.  There are expenses involved in getting to the settlement table.  Some of the expenses are seller expenses and some are buyer expensesNONE ARE REALTOR EXPENSES.

Seller Expenses:

  • General clean-up if needed
  • Remove trash and debris
  • Home staging
  • Pre-listing home inspection
  • Pre-listing appraisal
  • Home inspection repairs pursuant to buyer home inspection
  • Termite inspection (depends on state)
  • Termite treatment and/or termite damage repairs
  • Condominium or HOA documents for buyer or lender
  • Home Warranty
  • Moving expenses

More. . . .

Buyer Expenses:

  • Home inspection fee (may include well, septic)
  • Termite inspection (depends on state)
  • Credit report fee
  • Appraisal fee
  • Closing costs
  • Home Warranty
  • Moving expenses

More. . . .Lenn

None of the items listed above are Realtor fees.   That is not to say that, if a Realtor wishes to front expenses for a buyer or seller or pay for items to get to closing that they can't or shouldn't, although settlement procedures must at all times be observed.

OF COURSE REALTORS CAN PAY, IF THEY CAN.   Far too often the future Realtor fee is viewed as a source of money to get to the closing table.   We are often asked to contribute some of our commission to "make the deal work".  Or, the famous "how much of your fee will you REBATE?"  Realtor fees are negotiable but that doesn't make our fees a SLUSH FUND to subsidize buyer or sellers. 

I suggest that if the buyer or seller is expecting a subsidy of any of the fees for these costs of purchase or sale that they ask the real estate attorney for an upfront contribution of cash.


Courtesy, Lenn Harley, Broker,, 800-711-7988.



Want to learn more about Loudoun County, VA? Join Loudoun County, VA on Facebook!

Comments (5)

Margaret C. Taylor
Century 21 New Millennium MD - Mechanicsville, MD
St Marys/Calvert/Charles MD Real Estate Agent

Thanks for eblogging.  Great information.  Margaret C.

Oct 15, 2010 05:13 AM
Ken Rizza
Homestar Financial Corp - Buford, GA

I agree that roof issues need to be addressed even before a listing is taken, especially if the property is a candidate for FHA financing.  If the inspector doesn'tbring it up the appraiser will including rotten fascia boards and peeling paint which will stop your deal dead in it's tracks until it is fixed. Condo questionnaires are a given these days so you might as well get one up front. 

Oct 15, 2010 05:16 AM
Andy Kress
Rental Solutions Oahu - Honolulu, HI

We need to hang onto our money. We earn it. We work hard.

Oct 15, 2010 05:22 AM
Christina Sheppard
Solid Source Realty GA| Metro Atlanta | - Douglasville, GA
Real Estate Consultant

All I can say is WOW!  As you said we work on contingency fee.  I never discuss giving any money in the transaction.  If I were at the closing table and could make a deal work by giving something from my commission I may consider it, but otherwise NO!

Oct 15, 2010 05:25 AM
Zach Jiles
RE/MAX Champions Realty - Columbus, GA

Great post and advice. Thanks!

Jun 01, 2011 04:30 AM