Selling a house can feel like an ordeal because of everything required for a successful sale. There are various measures to take and several stages involved, one of which is a lender-mandated inspection.
The lender does this to ensure the property they’re funding for the buyer is indeed worth it. During the inspection, certain minor or major damages can be highlighted. The lender would then require these repairs to be made before they can proceed with the transaction.
Declining to carry out the repairs can effectively be a dealbreaker. It could even get more complicated if you don’t have the funds necessary for these repairs. Given just how much of a hassle this sounds, how do you go about selling a house with lender-required repairs?
What Are Lender-Required Repairs?
Lender-required repairs are the repair requirements that a lender or financial institution requests before they can approve a home mortgage loan. The primary purpose of these repairs is for the lender to protect their interest – they want to ensure your home remains in a good state and would not lose over the duration of the loan.
What Kind of Repairs Do Lenders Require?
While the lenders are indeed protecting their interest, it does align with the interest of the buyer, too. Most repair requests usually relate to safety, functionality and structural issues. For instance, a lender would not proceed until a leaking roof, faulty electrical system, cracked foundation, code violation or damaged plumbing system has been fixed. Others include:
- Broken stairs or missing stair rails
- Uneven floors or missing tiles
- Water stains on the ceiling
- Peeling paint
- Non-functional fire alarms and carbon monoxide detectors
Conventional lenders may not necessarily have an extensive repair list compared to the United States Federal Housing Administration (FHA). This is because of the strict government guidelines that guide the actions of the FHA. The list of repairs could include items like:
- Broken gutters
- Exposed wiring
- Peeling paint in homes pre-1978
Who Pays for Lender-Required Repairs?
The simple response here is that determining the party responsible for paying for these repairs is negotiable. However, in most cases, the seller usually ends up footing the bills.
This is primarily because buyers have other options they can explore, so, if you want to keep a prospective buyer, you would likely have to take on this responsibility. Most buyers prefer turnkey properties rather than having to handle repairs before moving in.
In a seller’s market, the sellers generally have the upper hand in the transaction since there are more buyers than there are houses available in the market.
In this scenario, buyers would be inclined to purchase properties that would only require minor or semi-major repairs. However, the repairs would have to be made first in order for the loan to be funded. Also, the seller would likely split the repair cost with the buyer too.
In certain cases, what each party would pay for would be outlined in the sale contract signed by both parties. Negotiations are only required if the contract is silent on this issue.
It’s advisable that you cover the repair costs to avoid having your house undervalued and to speed up the sales process, too. Since the loan isn’t funded without the repairs completed, and you don’t make your sale, doing everything within your power to make it happen is necessary.
How Do You Avoid Lender-Required Repairs?
If you’re looking to sell to someone working with a conventional lender or taking out an FHA loan, lender-required repairs are non-negotiable. Getting the repairs out of the way is an absolute necessity; otherwise, the sale stalls and the buyer could even back out.
This is why, before commencing the sale process, it is vital to conduct a pre-listing inspection to identify any issues in your home. Subsequently, you can get to fixing these issues, particularly if they are major.
Major issues like problems with the roof or foundation can have buyers back out upon disclosure even before the lender-mandated inspection. Some of these repairs may cost a significant amount, which you may not have.
In such a scenario, considering a local cash buyer is a viable alternative. You can avoid the hassle and financial burden that these repairs can constitute. Opting for a cash buyer helps you save time and money and provides peace of mind.
You can work with a tight time frame since you don’t have to conduct any inspections, you’re not awaiting any lender approvals, nor are there any extra requirements to sell your house. Finding a cash buyer is pretty straightforward. Conduct an online search to find cash buyers near you.
Ensure you’re working with a local cash buyer because they would be in the best position to understand your real estate market and value your house properly. For instance, if you’re looking to sell your house fast in the San Francisco Bay Area, you can find a local cash buyer easily.
Who’s going to buy? We can help out with that! We buy houses that need serious repairs or are in various other conditions. At dsouzahomebuyers, we can provide you with a cash offer for your house in no time!
You don’t have to deal with any of this hassle. No need for repairs or renovations!
Fill out this form to get the process started, and we could be closing in as few as 7 days! Remember, no fees, no commissions, no closing costs!
If you have any other questions, definitely call us at (925) 503 8193.
Final Thoughts
When selling a house with lender-required repairs, you can feel boxed in because of this impedance. Usually, there’s no way around not making these repairs, and if you delay for a while, the buyer could pull out of the transaction. Your best bet if you know your home needs repairs and can’t afford them is to steer clear of that sale route. Consider selling to a local cash buyer and skipping the entire bureaucracy. Ensure you’ve explored all your options before deciding.
