In escrow on As-Is REO, Bank refusing to loan on house unless seller repairs "Floor stains"

Submitted by Bob_Log t3_10pho4x in personalfinance

Edit: This is in California I discussed with my lender pre-offer that this was an As-Is REO owned sale and I knew there would be a myriad of repairs.

However, the seller's agent sent over an Appraiser (not an inspector, I waived inspections), the Appraiser chose to not Appraise the property as-is, instead, he stated the seller would need to fix things like missing electrical outlet plate cover (just the plate) and that there were stains on the wood floor that needs to get remedied and some loose siding that needs to get nailed down.

The appraiser didn't even mention the actual real issues, but my lender is claiming that since the Appraiser made a contingent appraisal, not as-is, that they need to have these things repaired or they won't continue moving us through escrow.

I'm really kinda lost where to go from here, do I approach other lenders? (I make enough that this isn't a problem)

I've seen advice that changing lenders and getting a second appraisal can overcome this, but I'm confused about why the Appraiser that the seller's agent sent, decided that stains and plastic outlet plates made this unfinancable for a conventional non-FHA loan unless these aesthetic, non-critical issues are remedied.

The seller is not willing to repair anything, any advice would be helpful. Thanks everyone!

2

Comments

You must log in or register to comment.

kveggie1 t1_j6kijfd wrote

Ask the appraiser. What instructions did the appraiser get? Appraiser determines the likely value of the home. Ask the appraiser if he has any expertise in home inspections.

I would NEVER waive the inspections. You are taking a huge risk.

4

vettewiz t1_j6kk1bz wrote

Waiving inspections is not a big deal if you have a clue what you’re doing.

1

Bob_Log OP t1_j6kj1hr wrote

I have worked in construction, I know what i'm getting into.

I cannot contact the appraiser directly, it's a conflict of interest, since my bank is his client is what I was told. All I get is the appraisal. https://imgur.com/zBapf3F

I have a copy of the appraisal and that image shows the only "Issues" with the home, which I cannot find anything from the FNMA or any minimum conventional loans requirements that list such minor deficiencies as reasons to be disqualifications for financing.

0

exiestjw t1_j6mw58a wrote

My guess is you're mistaken about where this appraisal came from.

An appraisal done by the seller would not end up in your lender's hands.

Even though you waived appraisal, your lender would still require one. They're the ones buying the house, they're not going to skip checking out the house just because you made an offer that wasn't contingent on a check of the property.

1

[deleted] t1_j6kiaif wrote

[removed]

−1