“Some Purchase Agreements, Create Problems, Part 1”

INSURED WITH THE FOLLOWING ESCROW REPAIR ITEMS:  Replace Doorbell (Wire currently exposed)   100.00    Replace Hot Water Baseboard Covers   200.00    Replace Outlet Covers   50.00

This clause was included in a purchase agreement that I received this morning. A clause like this may be OK between buyer and seller, but not with the lender. The loan will be a conventional mortgage with 5% down. There will be a home inspection, that I’m sure will bring up each item and an appraisal will do the same.

Between, the clause in the purchase agreement, the home inspection and the appraisal, the lender will require all work to be done prior to closing.   When I called the selling agent, she said she knew it was a problem, but the listing agent insisted on including the clause. She anticipated that the lender will require the work done and she would then go to work with the listing agent.

We are talking about $350 worth of work, wouldn’t it make more sense to get stuff like this done, even before the property goes on the market. A clause like this will cause delays and costs to the buyer.

Once the work is done, the lender will require the appraiser to go back out to verify that the work has been completed.