How Does It Get Done??

How Does It Get Done?

As much as we’d all like real estate transactions to move in straight, predictable lines, they don’t always.

One issue that comes up from time to time is related to repairs that need to be done (or are agreed that they will be done) prior to closing. This is sometimes the case when a buyer’s loan rules require the property to meet certain guidelines. Basically, the less of down payment a buyer is making, the more rigorous the lending standards tend to be.

For example, if a buyer is financing 100% of the purchase price through a Rural Development or VA loan, or even 96.5% through FHA, the house goes through stricter underwriting and appraisal processes. Kitchens and bathrooms need GFCI outlets. Stairs need handrails. The roof can’t be a total disaster. That sort of thing.
 

If the seller agrees to take care of those items prior to closing, and everyone’s ok if the seller picks who does the work, then fine. Pretty straightforward.
 

But what if the buyer is going to pay for the repairs? And what if the buyer wants things done a certain way? As the buyer, you’re going to be asking to pay for someone to do work on a house that’s not even yours yet.  

So, how does that get done?

Carefully.

In a recent transaction I was involved in, the buyers agreed to pay for the reconstruction of a small front porch. That’s kind of a big thing, and they wanted their person to do it, and they wanted to have it done exactly they way they wanted it.

So, we drew up an agreement between the buyers and sellers detailing the scope of the work, the timing of the work, who would pay for it, and then each side absolved each other of any liabilities or injuries.

This all happened after the appraisal was done, so each side knew that the only contingency outstanding was the actual loan commitment. And the loan commitment couldn’t be issued until the porch was fixed. Both sides also had a vested interest in the work getting completed. Without the porch repair, no loan commitment. And no sale. People would cry.

The important part is always to work with someone who has handled a bunch of transactions, and who is familiar with solutions. There are almost always ways to solve problems. Just make sure that you protect your own interests, and that the focus is always on completing the transaction.
 

The goal in this example wasn’t really to get a new porch. The goal wasn’t even to get the loan. The goal was to get the house. Which required a loan. Which required a new porch. See how that works?

If you have questions about buying or selling your house in the Montpelier/Barre area, email me at Ray@GreenLight-RealEstate.com, or call 802-225-6425.