On a conventional loan, are buyers required to make repairs on an as-is property in order to close loan?

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  • CJKatl
    Lv 4
    1 decade ago
    Best Answer

    On a conventional mortgage, in order to close, the home must be in "marketable" condition. That means everything must be in working order and good repair.

    The appraiser will have to comment on the condition of all interior and exterior building materials. If the condition is below-average, fair, poor, or worse, the item will need to be brought up to at least average condition for the loan to close.

    The appraiser will have to go back out, recheck the item, and certify it has been repaired. In addition, the lender will need copies of invoices, receipts, and canceled checks from the repair.

  • Anonymous
    1 decade ago

    It may depend on what state you're in, but in CA they are not required to make repairs. Most RE agents will ask the seller to give the buyer a credit back so that the new owner will be able to make the repairs after they move in, but the seller doesn't have to do that either.

    However, many sellers will give the buyers a little cash back for repairs because they don't want the buyers to back out of the deal.

    If the lender requires the repairs, that's a different matter entirely, but as far as I know only FHA lenders generally require repairs.

  • 1 decade ago

    NO !!!

    The seller is selling AS IS, and just because the buyer's mortgage company would require repairs to be done, does not obligate the seller. The loan may not close, and the seller may have to return the deposit on the contract, and may not get any other buyers with a mortgage that will accept the conditions of the home, but the seller is not legally obligated to make the repairs when selling as is

  • 1 decade ago

    On conventional loans (meaning not FHA or VA), if there is a small or no down payment, the underwriter may still require that the property meet certain standards. A big down payment can get the underwriter to OK a deal where no repairs are to be done. (I don't use the words "as is", since very few properties are actually sold "as is", but rather "in it's present condition, no repairs to be done by the seller".)

    But if repairs are being required buy the underwriter, they don't care if the buyer or the seller do them - just that they get done.

    Source(s): 15 yrs San Antonio Realtor
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  • Anonymous
    1 decade ago

    It depends on the state you are in and what the lenders require. If you were going to loan your own money to someone with the property as collateral would you care if the contract was "as-is"? Or would you require that the place meet certain standards?

  • Etta P
    Lv 4
    1 decade ago

    If the sales contract states as-is, and the property is in need of repairs to bring the collateral for the loan to be able to meet "minimum property standards, yes they would.

    Source(s): FHA DE Underwriter and credit analyst since 1979
  • Anonymous
    1 decade ago

    Depends on the inspection results. There are some things safety laws in some areas reguire. Examples could be lead paint, improper venting of carbon monoxide from the gas furnace or water heater.

  • 1 decade ago

    It depends on the inspection results. There are some things safety laws in some areas reguire. Examples could be lead paint, improper venting of carbon monoxide from the gas furnace or water heater.

  • 1 decade ago

    It depends. There are 203K loan programs that many of the investors utilize. Best to ask your loan officer or your Realtor as every real estate transaction is unique. Best of luck to you!

    Source(s): Realtor®
  • 1 decade ago

    ask the realtor or the lender.

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