Banks are very adverse to risks and one of the biggest oversights that home buyers misunderstand are lender required repairs. Whether you are obtaining a government-insured or FHA loan, you'll need an FHA appraisal. If you're getting a conventional loan, you can get by
with a conventional appraisal. FHA appraisals are stricter on requiring
repairs. The financial institution will not lend the borrower the money, unless repairs have been made to the home prior to closing.
Most of the time, sellers are willing to negotiate and work with buyers to resolve lender required repairs. However, if you are buying a distressed property that is selling in as-is condition, its best to know this upfront before you make an offer. When negotiating an offer, a seller may agree on a dollar cap for potential lender required repairs. Bear in mind that you maybe taking a gamble if your are going off a guesstimate and not actual repair bids.
The appraisal may require repairs on defects of the home and things that affect your health and safety. The lender learns of these repairs from notes found in appraisals, inspection reports, and insurance companies. Some of the most prevalent lender required repairs in our area are as follows, but not limited to:
