Nashville Tennessee Living


The Buyers want to Buy and the Seller wants to Sell Why isn't this Working!

The Buyers want to Buy and the Seller wants to Sell Why isn't this ForeclosureWorking!


Today my niece called me to ask for help or advice. She and her new husband went under contract in Mid-December to purchase a foreclosure. They were pre-approved and the property didn't need more work than they felt that they could handle. Financing was going to be FHA.

When the Appraiser sent in his report, he had a few repairs that needed to be done to meet FHA guidelines. Some rotted wood around a window and loose exposed wires where a light fixture used to be. No big deal right?




Her lender said that the repairs had to be done before closing. The Foreclosure bank said that the house was being sold "as is". We understand that. But when the Buyers wanted to make the repairs themselves, the Foreclosure Bank said "NO". Too much liability for the bank.

Neither agent wants to, or is able to, come up with a solution. The closing is supposed to be next week. I suggested escrowing the monies and then doing the repairs after closing, take pictures of the repairs and send them to the lender.

Lender said that the type of loan that they were getting wouldn't qualify. Now what do you do?

Everyone loses here. Buyer can't close and lose the home they want to buy. The property is being sold for about $135,000 and the next buyer is more than likely going to go FHA too. The same problem will occur over and over. So the bank keeps lowering the price to get it sold. They lose.

Neither agent gets paid next week, they lose.

What's wrong with this picture?


Connie Harveyis a local agent with Pilkerton Realtors, serving home buyers and sellers in Nashville, TN, Brentwood TN, and Franklin TN. Let her help you realize your Real Estate goals. She can be reached at 615-371-2474.

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Comment balloon 15 commentsConnie Harvey • January 23 2011 05:08PM


What are the repairs estimated to be (dollar-wise)?  It doesn't make sense when the majority of loans today are FHA?  Does the selling bank/investor realize that this will come up again and again unless there is a cash buyer clamoring to buy it!

Posted by Chandler Real Estate Liz Harris, MBA, #ChandlerRealEstateAgent (Liz Harris Realty) over 7 years ago

This is the stupidest thing I've ever seen. There's got to be a way to talk to someone at the bank to get this done.

Posted by Tammie White, Broker, Franklin TN Homes for Sale (Franklin Homes Realty LLC) over 7 years ago

Maybe the selling agent will let them do the repairs?

Posted by Lori Bowers, The Lori Bowers Group over 7 years ago

Liz - They just don't seem to care. The two realtors need to just get the repairs done.

Tammie - The Buyer's agent is new and doesn't want to step on any toes and the Sellers agent doesn't seem to care either.

Lori - That's what would make sense to me but neither seem to grasp that this is a lose-lose!

Posted by Connie Harvey, Realtor - Nashville TN Real Estate (Pilkerton Realtors) over 7 years ago

I've seen stubborn banks like this -- just too worried about liability.  Liability if they let the buyer do it, liability if they have the agent pick a contractor.  We are paralyzed by worries of liability. 

But the bottom line is that the bank ownes the property, and can do or not do whatever they like.

Posted by Richard Strahm, Lansdale and North Penn Real Estate (American Foursquare Realty) over 7 years ago


Unfortunately the picture is always the same!  Banks don't get it! Where is the 'common sense' here? Great post!  I sure hope they figure something out!  Let us know:)

Posted by Deb Jamail, Galveston County Real Estate (HomeLife Southern Properties) over 7 years ago

It is crazy, isn't it?  It boggles my mind that no one can work out a solution yet we have all seen it happen.  I imagine it is too late but is there no other type of loan product?  I've had clients where an FHA loan won't work (generally a condo that isn't approved) but they can get a MassHousing loan (obviously, a local product) that will work for them.  The buyers agent should also be doing whatever he can for his clients; there's a way to do that without stepping on toes!

Posted by Christine Smith, Exclusive Buyer Agent & Attorney, Canton, MA (Buyers Brokers Only LLC - over 7 years ago

Hmmm . . . and why is it that the banks are losing more and more money and are sitting on so much inventory?  You have to think they would want to work with a qualified buyer who wants to close next week, wouldn't you -- and get one more property off the books !  

Since the deal seems to be falling apart anyway, is there by any chance, someone they can get to at the bank who is higher up than whoever they are dealing with and ask them to weigh the cost of the repairs vs. the cost of holding out for a cash buyer?  Ask them to look at it logically?

Posted by Joyce Godwin, Realtor, CRS, RE/MAX Elite Properties (RE/MAX Elite Properties; Serving Cypress, Spring, Tomball, NW Houston) over 7 years ago

How about an FHA 203k?  It would take more time, but wouldn't it solve the problem?

Posted by Laura Giannotta, Your Realtor Down the Shore! (Keller Williams Realty - Atlantic Shore ) over 7 years ago

Richard - You're right but they shouldn't accept the FHA financing if they know that repairs will be needed.

Deb - Ah yes, the beloved common sense. It seems there isn't a lot of that out there anymore.

Christine - the Buyer's agent is exactly what set me off. She's newer and doen't know what she's doing. She doesn't seem to go to her Broker for help but is just sitting on her hands.

Posted by Connie Harvey, Realtor - Nashville TN Real Estate (Pilkerton Realtors) over 7 years ago

Joyce - there you go with logic now. LOL No one seems to have any sense except my neice who at least is calling people she knows looking for a solution to this. I have a feeling that we'll get it figured out.

Laura - that is one of the solutions I have proposed to her.

Posted by Connie Harvey, Realtor - Nashville TN Real Estate (Pilkerton Realtors) over 7 years ago

We talk about "the bank" as f it was one big talking head that can hand down decisions, when in reality it's a great big corporate mess of people all trying to pass the buck.  Everyone is overworked and they are being paid to get problems off of their desks (even if it winds up there again later).  Who cares whether or not that foreclosure goes south, the person handling it has been forced (by their superiors) to take the attitude that amounts to: if it fits the criteria, then fine; if not, move on!  You're right, unfortunately, if the deal is going to happen, the agents will have to take the matter into their own hands, but .. but.... the bank is the seller.  Geez.

Posted by Virginia Gardner, Realtor, Charlottesville, Serving Central Virginia (Roy Wheeler Realty Co.) over 7 years ago

Saw your post on AR, thanks for inviting us to your blog. I have to agree with a previous post that an FHA 203K streamline would do the trick. If their lender couldn't do it, someone else could..

Nice blog by the way!

Posted by Brian West - Mortgage Planner in AZ over 7 years ago

Virginia - the whole thing is very frustrating. I spoke with my neice this morning and it looks like the bank is going to let them go in and make the repairs afterall. Of course now they will have to move the closing out 2 weeks. Stupid, stupid, stupid.

Brian - Thank you. 203k's seem difficult to get done here but it looks like they've finally solved the problem!

Posted by Connie Harvey, Realtor - Nashville TN Real Estate (Pilkerton Realtors) over 7 years ago

Would the bank let the listing agent handle the repairs and then reimburse him/her at closing?  It would be a risk for the listing agent but might be one way to solve the problem if the repairs are minimal.

Posted by Kathryn Acciari, RSPS, SRS, REALTOR(R) Sturbridge-Shrewsbury MA (Cameron Real Estate Group) over 7 years ago