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Can Buyers Make Home Repairs Before Closing?

austin-home-repair-investorIn some real estate situations, the buyers may ask if repairs can be done before the closing of the sale. This is often the case for homes where financing isn’t possible; foreclosures with no heater, no stove and missing toilets as an example. For the sake of oversimplifying the matter, the answer is “no.” It doesn’t even matter if the seller agrees to this happening, the lender will not and your Austin real estate appraiser will be required to appraise the property “as-is”.

Lenders do not allow this because there is a risk that someone will default on the loan. A senior lien could be created against the property, and this becomes more of a priority over the first loan. If the debt isn’t paid and the contractor forecloses the property, the lender will never receive repayments for the debt. Of course, there is the possibility that the lender pays off the contractor, but lenders don’t want this issue. If lenders find out work has been done, they will refuse the credit.

Another issue is with the title company, which finds out the title has been altered and affects insurance. In fact, when the change happens, it can cause a lot of indemnification, which takes longer to close the sale, and can stop the closing entirely. Should the escrow not close, it ends up with the contractor going to the homeowner. The seller is then left with a mess, an annoyed contractors and a house that needs to be sold again.

repair-before-closing-homeInsurance issues also arise should there be destruction or damage during the updates. This is not something I am qualified to discuss, and a realtor will not able to answer your questions surrounding this.

Another popular question is whether repairs that have been contractually agreed upon can be performed before the closing of the sale. The agreement will usually state who will need to pay. The simple answer to this is “yes” because the contract is in place to determine who is responsible for payments and what will happen should something go wrong.

If a home is considered uninhabitable, a lender will not agree to a loan. However, the repairs cannot be done by buyers before the closing of the sale, even if it is to add heaters, toilets and other essential items. When a foreclosed/bank-owned property seller is looking for a buyer to pay in cash, it is a sign that financing is not available. You could get a great deal on a home if you have the money, but it is not feasible for most of the population. Hard money loans are another option, but that is a different animal entirely…

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Austin neighborhoods we appraise

We provide real estate appraisals and related services to the following cities, towns and communities across the Austin metro area. We cover a large portion of Central Texas - if you don't see your area below, please call to confirm with one of our friendly staff.

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Anderson Mill | Bee Cave | Briafclif | Brushy Creek | Buda | Cedar Park | Creedmoor | Del Valle | Elgin | Georgetown | Hays | Hutto | Jollyville |
Jonestown | Kyle | Lago Vista | Lakeway | Leander | Manor | Mustang Ridge | Pflugerville | Point Venture | Rollingwood | Round Rock |
San Leanna | Shady Hollow | Sunset Valley | Webberville | Wells Branch | West Lake Hills

what customers like you say about our
Austin Property appraisal services

We stand behind our work and our customers have nothing but great things to say. Here are a few examples:

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Real Estate Appraisals Austin
4.8
Based on 45 reviews
Ed came out on short notice to measure a new home I was in the process of purchasing. He was professional and honest in his work. I found him online and it was not through my lender. I wanted an independent appraiser since the lender was connected to my builder. Definitely will use him again if I ever needed to. I was a first time home buyer and he was fair to me and helpful. Thank Ed!
Jennifer Nguyen
Jennifer Nguyen
The realtor that came out was very professional and thorough. I would recommend this service.
Nancy Crow
Nancy Crow
This company is contracted to my mortgage company for market appraisals to remove PMI. They contacted me right away and had the whole thing turned around in less than a week. Appreciate the speed and the quality of the service and would definitely recommend.
Jeanna Kozak
Jeanna Kozak
I was able to schedule an appraisal just two days after contacting the company. Likely this was a fluke, but it worked well for me! Our appraiser was a bit late, but that was the fault of the previous appointment. Once he arrived, he listened to everything we pointed out. Our appraisal was fair for our neighborhood we thought and the report arrived about 8 days after the appointment. We are happy and will recommend Real Estate Appraisals Austin to any others we know.
Leah L
Leah L
We used Real Estate Appraisals Austin and found them to be very professional, accommodating and efficient. Their work product was thorough and very well presented. We would definitely recommend them and would use them again.
Calvin Porter
Calvin Porter