Saturday I had the privilege of visiting several homes with a client and we found a home they immediately fell in love with. The asking price is attractive, has a great floor plan, backs to an open area, very close to the neighborhood school and convenient to their workplace.
Sounds like the perfect fit, right? On the surface it is but there is a problem; the dishwasher and built-in microwave have been removed. Now you might be saying to yourself, “Big deal, just reduce the offer price and buy a dishwasher and microwave with the savings”, or “Ask the seller to install appliances before close of escrow”. But there is another wrinkle in the fabric of this deal.
The home is a short sale/pre-foreclosure listing. For those of you not familiar with short sales I will go in to more detail on these in a future post but to put it briefly, a short sale is what a seller does when they owe the bank more than they can sell the home for, which in turn leads me to believe they can’t afford to install a new appliances, never mind the fact that they shouldn’t have been removed in the first place. And since it is not yet a bank owned home (hence pre-foreclosure) the bank will not be willing to put the appliances in at their expense.
Now comes the real meat of the problem for my clients; FHA and VA loan guidelines require the dishwasher and microwave, since they are built in appliances, be in the home for the appraisal, final loan approval and funding. And since my client is using a VA loan to purchase the home there in lies the rub.
So there the house sits waiting for a buyer and the seller has dramatically decreased the chances of a successful sale by removing the dishwasher and microwave thus eliminating buyers who will be using FHA and VA loans to purchase the home from contention; stupid move on the seller’s part if you ask me. If the seller doesn’t get a dishwasher and microwave installed the only buyers who can even consider buying the home are buyers who are using a conventional loan and cash buyers.
So where does this leave my clients? We’ve submitted an offer and in it requested that a new dishwasher and microwave be installed in the hopes that the listing agent can track down the seller and get them to replace the missing appliances or get the bank to agree to do so. Now if only the seller’s agent would return my calls and emails, but that’s another post.
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