Ridiculous FHA rules

Even a sales contract with FHA financing almost certainly has a limit to the dollar amount of repairs that a seller is obligated to make. And certainly every contract SHOULD have such a clause. The seller should check his contract, read it and see what it says. If he gets an expensive quote to remedy the paint situation that's over the limit, he has an out.

It's simply not the case that if you have an FHA buyer the seller is on the hook to fix anything and everything just because some FHA inspector requires.

Also, from a practical standpoint, if he offers to return the sellers deposit in full and call it quits, there is a good chance the seller will walk. Their alternative, to suit for specific performance, while their deposit money is sitting in escrow, is not a particularly good option.

Reply to
trader4
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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."

Reply to
trader4

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 to
trader4

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Here's a link to an example of an FHA purchase contract from the web:

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Look at line 81 where section 8 begins. There is a check box for (a) which requires the seller to deliver certain parts of the home in normal working condition. Then look at line 116, where there is a check box for the alternative (b), As Is - Property shall be conveyed "As Is", with no warranty whatsoever as to property condition

So, clearly this example of an FHA contract has provisions for selecting (b) and selling as is. If as is were not an option, why is it right there in the boilerplate?

Reply to
trader4

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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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.

Reply to
Oscar

LOL... nice try, but breaching a contract, is breaching a contract.

Reply to
Oscar

Here's a link to an example of an FHA purchase contract from the web:

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Look at line 81 where section 8 begins. There is a check box for (a) which requires the seller to deliver certain parts of the home in normal working condition. Then look at line 116, where there is a check box for the alternative (b), As Is - Property shall be conveyed "As Is", with no warranty whatsoever as to property condition

So, clearly this example of an FHA contract has provisions for selecting (b) and selling as is. If as is were not an option, why is it right there in the boilerplate?

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Nice catch. It used to be, FHA would not sell as is. This is good information, to keep in the memory banks.

Reply to
Oscar

the buyers have NOT changed their minds. In fact, they are as infuriated as we are. They are now trying to get a conventional mortgage even though it will cost more.

Reply to
rile

Oscar, I really wonder how carefully you have read the real estate contracts you've been a party to in the past. A typical inspection clause allows the buyer to cancel the contract if the inspection discloses major defects that the seller refuses to fix. The seller is *not* required to fix *anything* unless he has previously agreed to do so. If an inspection discloses major defects, any of the following can happen:

(a) the buyer can waive the inspection contingency ("I don't care, I'll buy it anyway");

(b) the buyer can cancel the deal ("Give me my deposit back, I'm outta here");

(c) the seller may offer to reduce the price of the home; the buyer is under no obligation to agree (see (b) above);

(d) the seller may offer to repair the defects at the buyer's expense; the buyer is under no obligation to agree (see (b) above);

(e) the seller may offer to repair the defects at the seller's expense, in which case the *buyer* is probably breaching the contract if he refuses to consummate the transaction;

(f) the buyer may ask the seller to reduce the price, or repair the defects at the seller's expense; the seller is under no obligation to agree;

(g) the seller can tell the buyer to pound sand.

In the absence of a specific written agreement by the seller to make repairs, under which of these scenarios is the seller breaching the contract by refusing to do so?

Reply to
Doug Miller

Then what is the problem? You want to proceed with the sale, the buyers want to proceed with the sale -- why can't the sale proceed? Do the buyers not know they can waive an inspection contingency?

Why?

Reply to
Doug Miller

This isn't the standard buyer's inspection -- the FHA mortgage can't close without the approved inspection (similar to a conventional mortgage not being able to close if the appraisal isn't high enough). The buyers can't waive that (well, they can, but they then need to find a non-FHA mortgage, which is what it sounds like they're doing)

Reply to
Josh

========= reply below========

Jim,

Exactly, I provided proof the seller is contractually bound to fulfill their obligations.

If they fail to fulfill their obligations, they can't just walk away. I don't care if they put $100 as a limit, and never spent it, they don't have a right to walk away. They can, but then that's where lawyers come in for breach of contract. The seller must exhaust their obligations.

You & saltydog are a big part of what's wrong with this country. You both think you can just walk away from responsibilites.

Reply to
Oscar

You don't know a damned thing about either one of us, chump.

Reply to
salty

The buyers cannot waive the inspection contingency. It is a requirement for the mortgage they are seeking.

Reply to
rile

Responsibilities? I've bought and sold enough homes to know when a buyer or seller is jerking my chain. It's better to bail on a deal than get suckered. What happened to you and how were you taken?

Reply to
Big Jim

Oh, I seemed to strike a nerve. Walk away, it's appears to be your forte.

Reply to
Oscar

And now you're gonna tell me, you've done them all FHA, and walked away.

You're just being plain silly.

Reply to
Oscar

The "inspector" is actually a FHA appraiser.

It's obvious, the OP _agreed_ (signed a contract) to sell FHA, because that's the only way you can sell FHA.

The OP has repeatedly attempted to satisfy FHA, they have never said how many $$$ they agreed to spend to sell FHA. But, they're not painting out of the kindness of their heart, they _had_ to agree to this (contract). They must fulfill their contractual obligation, whether it be $100 or $5000.

Now read the addendum, I'm not copying/pasting for your convenience.

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BTW, I've addressed it more than once. There's been a couple other people address it also, you must not be reading through the thread, or you have them blocked.

Reply to
Oscar

rile wrote in news:fe7c7517-d1c1-44cb-95f9-e248ed94a692 @a26g2000yqn.googlegroups.com:

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Reply to
Red Green

Unless you removed ALL paint put on before the 80's and then repainted the raw surfaces, you could have lead paint. It need not be currently exposed. A child will chew or teeth on painted surfaces and the lead on old paint can e consumed.

If I am wrong about my interpertation

Reply to
sligoNoSPAMjoe

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