FHA appraisal next week -- required repairs

[unixman]

Hey all,

I have my FHA appraisal next week and have already been through underwriting with initial approval. I'm expecting at least some of the following items to come up for repair in the appraisal:
* exterior paint chipping in 7-8 areas
* frayed electrical service cable on exterior
* paint chipping on front steps outside house
* no handrails on staircase
* cracked window in kitchen
* attic is sealed up and not currently accessible

Any ideas what it might cost to get this in passing condition? The initial inspection came up with a sizable list of concerns... We really just picked the most concerning of the list (3 or so, including settlement cracks in foundation). We asked for an extremely fair amount of money to make these repairs and received a counter offer at less than 1/5th of what we wanted. Reluctantly, we accepted.

However, for these FHA repairs, each party (buyer and seller) is only obligated to pay $250 each toward FHA repairs... I have a feeling it will be much more than this. Because it is not yet my house and because we had to settle for much less on the inspection repairs, we plan to request that the seller fix anything the FHA requires over our obligation of $250. If they refuse, as much as we like the house, we are not under any lease currently and plan to walk.

Is it likely seller will end up taking care of these concerns? They are no longer living at the property and were in a hurry to close. I figure if they refuse to fix the issues, they will end up running into this same situation unless they happen to find a buyer with a conventional loan. By that point, they've already probably paid the cost of repairs in another month of mortgage payments.

What are you thoughts? Thanks!

[JM-AM]

Personally with all the items mentioned, unless I was getting the home for dirt nothing I would walk away from the entire deal.

Cracks while at times could be normal, they can turn into major structural issues. Easy repair a few hundred dollars up to hundreds of thousands.....

Electrical wiring that has issues of what you can see, what about the electrical you can not see? So they fix whats visable but in all actuality you need all new wiring. Can you afford a complete overhaul of electric? Easy repair once again about hundred dollars up to several thousands of dollars depending on what else needs replacing. Replacing all electrical on a 1900SQFT home in late Novemeber last year in this area cost 23K including wall repairs, paint, etc etc.. I am sure this number can be lower, but size of home, design or home, access to areas all play a part.

Paint chipping over the years from wear and tear is also normal, but it also shows the home owner never took care of the home, maintenance wise. So the hard weather environments has weatherized the home which may need other repairs besides just paint. Outside painting depends on how big the home is, and how many stories. Guesstimate would be one thousand up to 4K, plus any other work required.

Handrails on staircases have to follow code according to state, city and county laws. If they required handrails for code, why werent they installed? Was the work performed afterwards with out permits and licenses? If this is the case, how many other items were just done to put a bandaid on them to try and sell the home? Can cost a few hundred to put up to code if small staircase with a few steps, up to a complete removal several thousand and replacement to be done properly to code with permits and licenses.

Window cracked is not a big deal, you can replace the pane or entire window. Depends on size of window how much cost.

Attic not accessible throws up a ton of red flags, and that is also a violation of code in most states. Why sealed? Have no idea how much damage and or violations are in the attic. Cost of repairs would be unknown until torn open and very heavily inspected.

[MovingForward_2012]

Yeah, your situation is similar to the situation I had with my landlord. She refused to repair what was broken. She was also in a hurry to close. We ended up walking and found a beautiful new construction home. When I told her that I wasn't buying the home, she became hostile and sent a notice to vacate or face eviction. She ended up performing an illegal eviction but is still trying to sue me. I just fired my attorney that helped with avoiding the eviction as he hasn't done anything good since. She is asking for $6,000 or so. I found another lawyer and she is fantastic! We are no longer worried about her coming after us as the charges she listed were all bogus such as charging us to paint the outside of the home, for a broken microwave that was broken when we moved in etc. She is basically charging us to upgrade the home for sell and listed garbage that will no way fly in court. Plus, since she performed a illegal eviction and damaged the little property I had left there so I can sue her for damages and a portion of my security deposit back since the portion I am liable for doesn't exceed my security deposit. My cleaning crew arrived the same day her cleaning crew arrived and when i met them at the house, the locks were changed on me and her cleaning crew was already in the home getting ready to start so obviously at that point my goal was to get my remaining items and i had to call the police. So if she didn't illegally evict me, there wouldn't have been cleaning, etc. that she could sue me for. But you can't illegally evict someone and claim all these charges caused by that. But she is too stupid or brainwashed by her so-called lawyer to see that so i will let the judge tell her like it is. I won't sue her first because she wrote in her lease that only the landlord gets attorney fees and court costs back if they win so if she serves me, I will hire my new attorney to sic her. So we are not worried at all and are happy and moving on with our lives. She was threatening to sue us before we moved out to try to scare us into staying there or make us think we would be punished for leaving. We lived there for 3.5 years and I never paid her the rent late. We worked on negotiations for over a year but she kept increasing the price of the home and refusing to make the necessary repairs or try to pin them on me. I was renting month to month for about 8 months because the last lease she sent had the purchase agreement attached and I refused to sign until the repairs were made.

Did you sign a purchase agreement with your landlord? And if so, what is contingent?

If it were me, I would walk away. You don't have a lease. But I would wait until the last day required by law to notify the landlord of your intention to vacate. Given that the landlord is in a hurry to close, once he/she finds out you will not be buying, he/she may become hostile and throw a bunch of threats your way so you only want to deal with that for a minimum amount of days required by law. Good Luck!

Remember your landlord is getting paid off the sell of the home...not you. So it is very common for them to get greedy and refuse to repair what needs to be repaired or hire a shady unlicensed handy-man to the home to make repairs. If you plan on purchasing the home, DO NOT let an unlicensed handy-man touch ANYTHING! Our landlord sent this unlicensed handy-man to repair the air conditioner March 2011. In July 2012 it broke down again and I ended up having a licensed professional come over and take a look at it and found out the "handy-man" repaired it wrong and sparks were shooting out the unit in 100+ degree heat threatening to set the house on fire. So please make sure a licensed professional makes the repairs or you could have a headache's worth of expenses that will be your responsibility.