Expert: Connie Wildasinn-Broker,GRI,Realtor® - 12/11/2009

Question
QUESTION: I am in escrow right now on a house that was listed MLS as being 1650sq ft having front and back sprinklers,  central heat and air, dishwasher,, stove 2 bathrooms 4 bedrooms....ect. And  when I got it inspected He said there are no sprinklers in the back the front ones were capped off or missing, the dishwasher isn't co-necked, the heat and air doesn't work from age and the add on room off the kitchen isn't permitted so it's registered at the county clerks office as 1300?? sq ft. My Realtor says that she might ask the bank (it is a short sale) to fix the ac / heater, but that's all from what I got from our last phone call about it.... is that room going to be covered on our home owners insurance? Isn't she supposed to try and get them to fix some of this stuff. Is my Realtor doing her job???? Bakersfield CA

ANSWER: Hi Caryn,

You mentioned a few items that are different from MLS to reality.. there is a disclaimer on the MLS that all information is to be verified by the buyer... that said ... you thought you were purchasing a home that is 1650' not 1300' big difference and the appraiser will give NO value for the extra non-permitted space... although you may give it value... welcome to old school... the market has changed...

You mentioned you realtor will ask the bank... if this is a short sale it still belongs to the seller (a person - not the bank) my experience with sellers who will receive no monetary compensation at the sale... they are not motivated to do anything.... so good luck... you have had your inspection... you may try to have the price reduced... but the price on a short sale is set by the lending bank that is loosing the money and they have no incentive to help you out...but they will fix nothing... they don't own the house... best they can do is agree to reduce the price possible but don't count on it... typically short sales are listed at value or slightly under... but no great bargain... just a way of getting the property sold that is unsalable otherwise...

If the property is bank owned RENO - again the bank will make no repairs... they be in a different state... I have one in India right now... on the other side of the world... but they will take the price down ... especially if the appraisal does not come in... almost any bank would rather stay in a transaction than have to start all over with a new buyer again and end up with the same issues again.. they are simple number crunchers... completely from and investment/ profit- loose situation...

on the insurance issue... call you insurance agent... ask them each company is different ... what one will cover another will not...

Is your Realtor doing her job... can't answer... but you make sure you are getting the answers you want... and don't stop asking. this is a big step for  most buyers and you should be satisfied they your questions have an answer...

If the house is too much be sure you are in your time frames to pull out without loosing your deposits...

Good luck!

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

QUESTION: Ok so I After my inspector gave his report there were alot of things that The FHA appraiser should have put down as FHA violation or whatever on the house that would have to be fixed or they're not supposed to even give me the loan right? The unpermitted room add-on (the appraiser put down all the sq ft and didn't say it's not permitted, Leaks in bathroom  sink, tube and the toilet has to flush but it's not even connected, septic tank has set for more then 90 days so it need to be inspected, leak in garage wall, crawl space above garage is not accessible (been sealed off#, The heat/ac did finally turn on but hey guess what It leaks CO2 #carbon monoxide# into the house #deadly fumes that can't be smelled unless tested for# thank God I got an inspector cause The Appraiser I payed the bank $485 for put NOTHING down! NOTHING!!! according to him #him who's on the banks list of appraisers'# this house is all good and up to FHA code. # not according to FHA appraisal checklist though#. Now I've had alot of friends, clients, and family buy houses in the last year and there FHA appraisers put down everything from AC/Heaters to loose doorknobs and they had to work out between them #them %26 the sellers# who fixed what. I asked for a new appraiser but my loan lady said I have to tell the underwriter the the things and have him go back #the first appraiser!#. I don't think he did his job?? And I've asked another realtor of someone in the family some Questions since mine can't ever tell me anything, And He said even if they fix everything I will be up side down 20-30grand going into this house at the price there wanting to sale it#from the appraisals in a half mile of that house that he checked#.So I had my realtor write everything up I want fixed and attach the inspector report And I had my air guy go check the dual AC/heater and right his own report and attach that to, And put on there myself that I want a knew appraiser. If they don't give me what I want #appraiser, fix and or lower the price) should I just drop out and If they don't give me my deposit and I think I should get back that $485 for the appraisal  back too, should I call a real estate lawyer? Does this all sound fishy to anyone else? home buying in CA

Answer
Hi Caryn,

I am sorry you are in this transaction... as a first time buyer, it is so important to have a Realtor who actually knows what they are doing and can assist and guide you through the process... at least that way you have the control to know what you can and can't do, how money is spent and how to get credit if that is an option...

First... the appraisal is the appraisal... you have paid for that and WILL NOT get the money back... you can pay for a new appraisal and see if that appraiser is accurate... keep in mind 5 appraisers = 5 opinions... there are certain standards, but no absolutes... I do not have the actual paper in front of me, so I am taking your comments at face value... but in my many decades I have learned there are always two sides to every story, and you can not know what you do not know... so your perspective is limited in that knowledge.

No house has to be in perfect condition... FHA does require some basic conditions to be meet... ie: the leaks, square footage issue, heat (a/c is not required)

It sounds like you have gotten into a property that is way above your expertise... the ability to repair and fix and still have a value you see as doable to purchase this property at the agreed upon price...

I have no way of telling if you got a steal or a deal or the short end of the stick with an overpriced property... your Realtors job was to figure that out with you... but ultimately, the buyer (you) make that determination...

You need to read your contract, sit down with your agent 'Broker Manager' and go through EVERY concern that you have, get your answers to the contract you signed and either move forward or pull out...

If you choose to move forward the most a bank owned property will do is reduce the price to compensate for repairs, they WILL NOT FIX (as a standard rule) anything... they don't have the ability to do so and it could open up a new can of worms, the bank will not want to be responsible for.. ..

I would start with the Broker Manager... the real estate lawyer will cost you money and if you don't know one already you could end up with a lawyer looking for billable hours and just be out even more... plus you don't own the house yet... keep in mind... dollars spent to value received... and what your ultimate goal is...

Sometimes it is better to walk, $4-700 is a small price to pay... better than a loan that covers $485,000 that you will pay close to $900,000 at the end of 30 years!

I wish I could give you a more definitive answer... but you have some research ahead of you ... conversation with your realtors boss... and hard decisions to make...

Good luck!