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Buying or Selling a Home/BANK OWNED REPAIR ALLOWANCE

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Expert: - 2/29/2008


Question
QUESTION: SELLER(BANK)$5,000 TOWARDS REPAIR. HOW DOES THAT WORK? DO I SUBMIT BIDS? IF SO, WHEN? DO THEY HAND ME A CHECK AT CLOSING?

ANSWER: Dear Martha;
Ask them what they prefer.  Usually, you just bring the repair bills to closing as proof that the work was done. Sometimes, they require the proof and others they don't really care. In this instance it sounds like they are simply adding the $5,000 as the allowance regardless of the cost.  If they are crediting the $5,000 it will show up on the closing statement and will be debited to them and added to your credits.  Every so often, I do see checks handed over, but that is not the norm and most attorneys like to balance everything on the closing statement to satisfy the underwriters.  It is only when something comes up the last minute that deals are struck at the closing table and checks written.

Best wishes,
Jessica Bryan

---------- FOLLOW-UP ----------

QUESTION: THANK YOU FOR YOUR PROMPT RESPONSE
NOW A NEW WRINKLE... FHA SELLER ALLOWANCES CAP?  PURCHASE PRICE $105,000.00 CLOSING COSTS ALLOWANCE $2,700 AND $5,000 REPAIR ALLOWANCE.


Answer
FHA has some strict rules and guidelines for loans.  There are certain things that are allowed to be paid by the seller and those items that can be paid have had a cap set on them.  You might want to check with the bank to find out how much the cap is.  However, if you aren't doing an FHA loan then there is no lender requirement.

~Jessica Bryan

Buying or Selling a Home

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Jessica Bryan

Expertise

buying and selling process such as:
General questions from first time buyers
How to market a home
Why choose a REALTOR
How do I find a REALTOR
Should I consider buying or selling without a REALTOR--how much can I save
Should I remodel or move
How much can I expect to gain by fixing up my home before selling
Helpful tips when selling
Helpful tips when buying
finding a good mortgage loan
what is the difference between banks, mortgage bankers, and mortgage brokers
Questions from the general public, people thinking about getting their real estate license, newly licensed.
Fellow professionals who have interests in networking and how to get started
What is a market evaluation and how does it differ from an appraisal what are the different loan programs
services a REALTOR can perform
when to use a lawyer
when to use escrow
what are the regional differences in the buying and selling process
what is the MLS and how does it work
how can the layman access information on the web--listings and other information
These are just a few of the questions. I can suggest that if I am unable to answer a question I will refer the inquiry to a source that can.

Experience

Anyone who is in this business and who dedicates oneself to professionalism has continued to take classes and along with it,additional credentials, awards and honors. I can list a host of them, but my greatest accomplishments happen to be those of getting first time buyers (who didn't think they could afford to buy a home)into a home of their dreams. The look on their faces when I hand over the keys is worth all of the hard work.

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