How likely is a Conventional appraised subject to repair?

[David Krive]

Hi everyone, first time home buyer here. My wife and I found a 1954 1570 sqft in sacramento with a detached 700sqft garage and a 20x40 swimming pool.

Overall the house is in very good shape, but has some deferred maintenance. 

Our mortgage lender gave us the option to waive the appraisal - however, we have a clause in our contract that if the appraisal comes in over 10k low, our price goes down to appraisal +10k.

So, we are leaning towards ordering appraisal anyway, on the gamble that it comes in low and we get a discount. 

On the other hand, we are trying to assess the likelihood that an appraisal may make the conventional loan subject to repairs, which will be a big problem due to our shortened time frame (7 day inspection, 14 day appraisal, 17 day loan, 30 day close). 

Possible issues:

Minor amount of chipping paint in a bedroom and some exterior siding - in a pre 78 house 

Few small holes in the walls 

Uncovered electrical breaker in bedroom 

detached garage may need new roof 

Swimming pool has no cover or fence, and back yard fence is broken. Also needs resurfacing and new equipment but I don't think that's a problem for a lender (?) 

detached garage has a bathroom, the glass shower door is cracked 

To recap:

We are deciding whether to waive the appraisal 

If it comes in low, we will get a lower purchase price 

If it comes in subject to repairs that take longer than a few days, we will probably lose the sale 

If we waive it, we save $700 and the sale should go smoothly 

Has anyone ever had a conventional made subject to for any of the above, and what is all of your advice? Thank you!! 

[Will Fraser]

HI @David Krive, I have never seen a Conventional loan require repairs as part of the appraisal except on mobile homes.  

Sidepot question:  Do you think it's realistic for the appraisal to come in low?  Unless your market is an exception to the overall trend (of being inflationary right now) OR you have it under contract at a bloated price, I would be rather surprised if the appraiser didn't find a way to substantiate the contract price.