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Old 04-08-2013, 06:29 PM
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Default Re: House Buying in the USA

Eddie: +1 for what Fred said. Every house I have sold over the years, I had to fix the items that the inspector said needed repairing before closing, so all of this is on the seller, not you. It doesn't really matter whether or not they are cash poor. I owned three different houses in Alaska and none of them passed the perk test and some work was required on the septic system before closing.

You guys either need to renegotiate the price or figure out a plan to have those items fixed and I'd make sure everything is in writing and probably a good idea to have a lawyer. I'd be really surprised that you would be able to get a loan on that property without the items repaired before closing. Fred has more experience in this than I do, but here is my experience. The housing market in the U.S. collapsed in 2008 due to some very shady lending practices. I bought a place for my son that had been in the process of being built when the owner ran out of money and the property went back to the bank. It didn't have an occupancy certificate, there were 22 items that needed completed. Five other people had tried to buy that property before I did, but I didn't understand what had happened. I hired a contractor to give me an estimate to complete all the items on the list, then contacted the title company that I had been working with to secure a loan and suggested that I could put that amount of money in escrow to have the items completed, they said that would probably work. Then along comes the lendor's appraisor, he says no, all those items have to be completed before closing plus his items. There was only three days to closing so this wasn't going to work and the bank didn't seem to care whether or not the house sold, they were planning on putting it up for auction and wouldn't extend the closing date. I then had my son contact the local inspector and the lending appraisor and find out what the critical items were that had to be done. Once we had that we put the contractor to work, two days later they came in and reinspected the property, all of the must have items were completed so they signed off on everything and the closing went off as scheduled the next day. Everything turned out ok, but I had approx. $12k into that house with no guarantee the closing would be completed, so I was hanging my neck out for sure.
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