Expert: Dick Dennis - 6/23/2007

Question
I am in the process of closing on a house in the Buffalo NY area.  My mortgage is currently in underwriting, and they ordered a standard home inspection to ensure that it is in their best interests to finance the property I am buying.  The home inspector cited that the property needed about $1000 worth of repairs for safety reasons, before my lender will move forward with my loan approval and closing on the house etc.  These repairs are all minor and could easily be done in a weekend with some help from my family members.  The problem is, this property is Bank owned and is sold "as is".  After consulting with my attorney, they said they would see if the seller would allow me on the property to make the needed repairs, so that my financing could be completed.  My attorney also told me that it was unlikely that they would allow me on the property because that is very uncommon.  So I can't get my financing approved because the house needs a few repairs, and I can't repair the house because I don't own it.  After consulting with my mortgage agent, she told me that many houses which end up in this type of financing limbo, will somehow end up with the repairs "magically" completed, once the buyer asks their lender to set up a second appointment.  Basically, she hinted to me that I should just go to the property and do the repairs without permission and that then we could move forward.  Is this a common flaw in the real estate industry, and do most people really break the law just to get into their house?  Should I be concerned about the seller or my lender finding out what I did later on and getting in trouble, or do most of these people just look the other way when the repairs are "magically" completed?  Thanks, and any anecdotes or special advice is appreciated  ~Alicia

Answer
Trouble is, Alicia, you want the property more than the seller (the bank) wants to sell it. Now if you can turn the scenario around, you may get what you want. This market is not what the seller can dictate terms and conditions. Simply tell your agent (she's not going to like it and will probably try to think of a way to change your mind so she doesn't lose the commission) that you changed your mind. "Please let me know when the sellers have changed theirs."

Any agent that implies that you should enter someone else's property to do repairs is not an agent with whom to do business. What happens if the repair person(s)hurts themself or accidentally sets the property on fire? Are you willing to take that risk?

If you REALLY want that house, then come a little closer to the seller and tell them that they can raise the price by no more than, say, $500 or even $1000 and THEN THEY ARRANGE to have the work completed BEFORE you move in.

Otherwise, Alicia, I would walk away from that deal. I wish you well.

Dick Dennis