Ridiculous FHA rules

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<snip>

Actually, Big Jim reminds me of myself, back when I didn't have a clue about FHA. People tried to give me advice _not_ to sell FHA. I was one of these, yeah I'll get my lawyer. Well, lawyer's don't give advice for free, if you have one on a retainer, it's still not free. Bottom line, you're not gonna break a contract, without paying through the nose.
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Oscar wrote:

Afaict there is no contract w/ the seller at this point...he apparently has an offer but that's no contract...
In general, one is incredibly shortsighted to undertake a major transaction w/o the services of appropriate counsel...
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You missed the OP original statement. "We are selling a house to a buyer using an FHA mortgage." FHA just doesn't go around inspecting houses, because someone is thinking about buying this one or that one. There must be an offer & acceptance. Thing is, FHA goes in after the acceptance, at least they did in my case. The way the OP sounds, they're doing it the same way to them.
> In general, one is incredibly shortsighted to undertake a major

I'll tell ya, it was a while ago when I sold FHA, and a lesson well learned. Unfortunately, they are unscruptulous realtors (like you didn't already know this), which will talk people into selling FHA/VA, without telling the drawbacks.
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Oscar wrote:

Obviously there's an offer; apparently OP is satisfied w/ the pricing as he made some attempts to satisfy the conditions of an (pretty obviously contingent) inspection but that still doesn't lead to there actually being any contract yet in place. There's an existing document that could conceivably turn _INTO_ a contract, but it ain't one at this point.
For example, seller (OP) could instead of continuing the aforementioned charade simply make a counter offer of something like $X for buyer to accept w/ the existing report. Ball is then in buyer's court and negotiations can continue from there or one party says "no mas" and retires from the battle. In OP's shoes unless I were _truly_desperate_ for the sale I'd probably simply say "as is w/ report noted" but with attached statement regarding whatever is own interpretation of the particular situation (in this case the Pb paint issue) if didn't think the inspection report accurate or as in this case overblowing the seriousness of a finding ending in, in essence, "take it or leave it" and let them decide how badly they want the house. Most folks by the time they actually make an offer are emotionally committed and they'll concede the small stuff.

As the previous quote from the FHA says, they don't do inspections at all; it's your job (or the lender's to see you do yours). Thus it's really whatever _the_lender_ requires rather than FHA--FHA doesn't really care, specifically. That was what was when last dealt w/ one; the verbiage at www.fha.gov doesn't read any different in quick look-see on that point than did 30 years ago. The problem is that to meet the other requirements for qualifying for the insurance they have to show in essence extreme diligence so their (the lender's, that is) requirements are more stringent than for a conventional mortgage.
In short, afaict from a quick perusal of the FHA site, whatever is this hangup has more to do w/ the lender's procedures w/ FHA mortgages than it does w/ FHA per se. That may seem like a minor difference but it's significant.
--
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Every state has this addendum. The seller _must_ sign it b/4 selling FHA. I do notice, they have where the seller can put a $$ amount in, in order to cap off meeting FHA minimum standards. http://realestate.utah.gov/REForms/New_FHA-VA_addendum.pdf
Oh, but you are wrong, it is a contract. Stating there's not one now, the seller would have to be a lunatic to go through what they are going through, just because someone is interested? Surely you're smarter than that.
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Nothing in that addendum legally compels the seller to fix anything unless he wants to complete the sale. If the seller wants out, all he has to do is... NOTHING. He cannot be forced to fix so much as a dripping faucet if he decides he doesn't want to complete the sale.
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Exactly. Of course a desperate seller miight do more. A casual seller or one during a boom may choose not to fix anything. The buyer and/or lender may walk away but the seller is never under obligation to fix anything unless he/she agrees to or there is a C.O. involved or other local regulation such as well testing etc. Oscar doesnt seem to realize that in most states used houses are sold as-is . It is up to the buyer to inspect and request repairs. Oscar got ripped off and can't believe that there are people who are wiser than him.
On Aug 12, 6:39am, snipped-for-privacy@dog.com wrote:

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wrote:

Good grief, now I have to explain what an addendum is. No, I won't be a teacher here. Read the top, let it soak in. Then read the entire addendum, not what you just want to read. Maybe pay particular attention to item 6, now you have to know what REPC is, well I do, and you apparently do not.
The didn't start fixing stuff on their own, obviously after going through offers/counter offers, then acceptance, they started their painting.
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MEGO
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Oscar wrote: ...

...
It begins life as an addendum to a contract _OFFER_; it doesn't comprise an enforceable _contract_ until executed by both parties.
Not only does it have the provision for limitation of cost of repair to seller, look at the bottom--there's even a provision for counteroffer from seller.
Again the reason for having counsel before jumpin' in--they know the groundrules under which the game is played so to protect yourself from inadvertently committing oneself to a sizable problem. And, of course, they solve the COI problem of not having an agent actually representing your own interests.
--
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You do not know what an addendum is. Good grief, its in addition to a contract offer.
I understand offers/counter offers, apparently you don't. The OP started doing the work, not out of the kindness of their heart, but because at some point there was an offer & acceptance. For some reason, you overlook of why they are doing the work.
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Oscar wrote:

I most certainly _do_ know what an addendum is...and, in fact, that's what I explicitly said. Again, there was an offer; there's not a contract of which this addendum is a part _until_ there are valid signatories.

We (at least I) don't know that for certain--it was never stated explicitly or if it was I didn't see any statement to that fact.
_IF_ (the proverbial big if) OP did sign an essentially open-ended contract then he can only reap what he has sown and his best option is again to get guidance from somebody on his own nickel to help in demonstrating that the supposed defect has been adequately taken care of.
--
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From experience in how the sales process works, it is very reasonable to conclude that there is a 99% chance that a contract does in fact exist. A mortgage company/bank does not send out appraisers, inspectors or anyone else without a completed mortgage application and any required fees. A most basic part of that mortgage application is a COPY OF THE EXECUTED PURCHASE CONTRACT. The fact that the FHA inspector is there almost surely guarantees that the contract is in place.
To do otherwise, they would be wasting time and money ghosts half the time. And the buyer would have to be an idiot to start wasting time filling out mortgage applications, usually incurring fees to do so, hiring inspectors, etc without a contract.

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From experience in how the sales process works, it is very reasonable to conclude that there is a 99% chance that a contract does in fact exist. A mortgage company/bank does not send out appraisers, inspectors or anyone else without a completed mortgage application and any required fees. A most basic part of that mortgage application is a COPY OF THE EXECUTED PURCHASE CONTRACT. The fact that the FHA inspector is there almost surely guarantees that the contract is in place.
To do otherwise, they would be wasting time and money ghosts half the time. And the buyer would have to be an idiot to start wasting time filling out mortgage applications, usually incurring fees to do so, hiring inspectors, etc without a contract.
=======reply below==== Someone with common sense. I don't why I wasted so much time, attempting to explain common sense to some individuals, it won't happen.

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Snipped this, and really didn't want to.
You're absolutely right, if I said somewhere FHA does inspections, it's not a regular home inspection. Their inspection is from the appraiser, to make sure it meets FHA minimum standards.
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Of course there is a contract in place. I've yet to see a bank/ mortgage company involved with inspections on a property without having a purchase contract. That is the most basic requirement as part of the whole mortgage process. They want a contract that shows what the property is, what the purchase price is, how much is being financed, how much is being put down, etc. together with the application fee. Only then do they send out any appraisers/ inspectors.
And also, any buyer would be an idiot to pay a mortgage application fee, home inspection fees, attorneys fees, etc without having a contract. He could spend that money and then have the seller say: "Never mind, I found another buyer at a higher price."

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snipped-for-privacy@optonline.net writes:

It's not always that simple. The process and sequence from offer to contract varies regionally.
In MA, it typically works as follows: 1. Buyer and seller negotiate price and basic conditions resulting in a written, signed "offer" from buyer to seller that is then signed by the seller. Typically, a small ($1000) deposit is given by buyer to obligate himself which is placed in escrow. Seller also is precluded from marketing and selling property. The offer itself is short, boilerplate, and sparse on details with only a few blanks to add in things like "includes fridgerator and curtains".
2. Typically, the "offer" has several contingencies such as inspection and mortgage overall. The buyer usually has about 1-2 weeks to resolve the contingencies, including getting an inspection and obtaining a mortgage commitment. If contingencies aren't met then, the buyer can walk. Alternatively, they can renegotiate terms. The contingencies are usually worded to make it easy for the buyer to walk at this stage in almost all cases. At worst, the buyer loses his $1000 deposit.
3. A Purchase & Sale (P&S) agreement is then signed. Typically, an additional deposit of 5-10% of purchase price is added. A lawyer is usually brought in at this stage to review and/or edit the "boiler plate" basic agreement. This agreement is much more detailed and binding than the Offer and typically has few real outs unless buyer is willing to give up his much larger deposit and potentially be subject to suit for damages. The P&S also lays out the timing and terms for the actual sale
4. Final sale documents are negotiated and agreed upon between buyer and seller. Both sides are advised to have lawyers involved. The bank is also involved when there is a mortage. The sale documents are signed at the time of the closing.
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Actually, all he has to do is... NOTHING.
The house has failed the buyer's inspection. The seller has NO obligation to make it pass. If the contract stipulated that the house must pass the inspection fopr the deal to be completed, then guess what? Game, set, match.
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wrote:

FHA is nothing like a selling conventional or even _as is_. When you _agree_ to sell FHA, you must meet their regulations, not yours. In fact, you can't sell FHA _as is_. That is part of the selling procedure.
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Oscar got taken and is angry that not everyone is as clueless as he is. NO lender, buyer etc can force anyone to make major repairs. They can deny the loan but that's it.

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