Herding Cats: Notes From an LO
Someone much wiser than I once told me that there are always three sides to a story: Party A’s side, Party B’s side, and the truth. In the mortgage/real estate world, that’s especially poignant.
On a recent transaction, the real estate agent representing the sellers was eager to get the appraisal ordered –we had a short escrow, and she wanted to make sure there were no delays. I don’t blame her at all, as it’s her job to keep the sellers’ interests at the top of her priority list. When I conferred with the buyers’ agent, I learned that the inspection had JUST been completed, and he and his clients had just sent over their response for what they wanted to see repaired.
I reminded the buyers’ agent that, while I didn’t wish to delay the transaction either, we needed to be mindful of certain aspects of the appraisal process. In this instance, if the appraiser went out and did her/his job before the repairs were completed, there’s a strong possibility the buyers would have to pay an additional $150-250. Why? If the appraiser included mention (and photos) of these unrepaired items in her/his report, the underwriter would require the appraiser to go back out to the property to confirm that the repairs had been completed. The underwriter is not going to accept a note and a pinky promise from anyone else that this has been done –only the appraiser can confirm this. And if this were to be required, the appraiser would charge a return-trip fee, and the buyers would be the one paying that fee.
We explained all of this to the buyers so they could decide with their agent how they wanted to proceed –all agreed to have the other agent stress to her sellers that these repairs needed to be made quickly (and correctly, of course) so the appraisal could be ordered in a timely fashion. As an aside, one of the repair items was exposed wires in an exterior sprinkler box (the timer most likely), and one of the buyers laughed and said it could probably be “fixed” by closing the box before the appraiser showed up. No argument there, but I wouldn’t want the buyers to have to pay $150-250 because someone forgot to close that box. The buyers agreed with me. And herein lies the dilemma:
Party A’s side (sellers): we’re busy professionals, and we’ll get to the repairs when we can, but we don’t want the transaction being held up. We’ve given you concessions, so work with us.
Party B’s side (buyers): we met your asking price on the house, so all we’re asking is that you get these items repaired quickly. We’re going to need that extra $150-250 for “house stuff”.
The truth: the underwriter isn’t going to fund this transaction until all the repairs are made and nothing appears on the appraisal that would adversely affect the “lendability” (I’m pretty sure there’s a better word for that) of the home.
In all of this, my job is to spread my arms wide and keep everyone (including the underwriter) moving in the right direction –it’s often like herding cats. Regardless of how we get there, as long as everything closes on time, I’ll take my scratches –I can always make up a really cool story about how I got them.
appraisal, mortgage, prioritylending, realestate, underwriting