All Forum Posts by: Ryan Davis

 That is a good idea, my only thought of that is this; say everything went south after all the work was performed, with filing the mechanics lien is this something I would need a lawyer for? I'm just thinking if everything went bad, I would hate to dump a lot of lawyer fees on top of rehab cost. Maybe this is just part of the risk but just checking. 

Thanks everyone for your opinion, I wasn't aware that FHA has those strict guidelines.

As the day has gone by, the selling agent has notified the seller of the low appraisal and he has come back with what he can do. He said that he can lower the selling price to $135k but not pay any closing cost. This is a big bummer to me as I don't have the cash to cover the down payment as well as all of the closing cost plus all of the repair cost that will go into it. 

Think this deal is going to fall through to be honest. Oh well, what can you do. Gonna move past this one and keep searching. 

Thanks for the advice everyone! 

Update: 

I was just informed that the reason the floors are going to have to be replaced before closing is because the $135k appraisal is accounting for new floors already. But the same question remains, Is my agent trying to pull a stunt here by trying to get me to cover this cost before closing? I feel that I shouldn't have to do that before the closing date. With the lower appraisal, is this a deal I should give up on? I've ran my numbers, and I can get about $400 in cash flow once I move out. Until then, I would only be paying about $50/ month for my mortgage once I get a tenant in. 

Would love some advise on this one, thanks! 

Hello Bigger Pockets! 

I am trying to close on my first deal and I am running into a few issues, here's my story;

I am under contract for a duplex where I plan on house hacking. The agreed selling price is $139k and he is paying $4800 of my closing cost. To make a long story short, I have paid $435 for inspections, $635 for an appraisal and $500 of earnest money. The appraisal for property came in today and it came in for $135k. The reason for this is because one unit is in really bad shape. It needs a complete remodel (luckily I run my own contracting business). My contract with the seller states that he is going to replace the refrigerator, stove and paint the walls in that unit. Originally, he wanted to include replacing the carpet in the unit but not pay as much closing cost, but I offered back, for him not to touch the floors and pay more closing cost. The reason for this is because I want to upgrade to laminate (more durable).  

Well now, because the appraisal came in low, my realtor is trying to convince me to start replacing the floors with laminate (before the closing date). I have rejected and told her I already have a lot of money on the line (with the inspection and appraisal money) and I am definitely not installing new floors on a unit that isn't mine yet. Her reasoning is because the bank is going to require new floors to be put in before they loan out the money because the current ones are so bad. (This is an FHA loan). She is afraid that with the bad news of having to replace floors, and having to come off the selling price of 4 thousand dollars that the seller is going to walk. I am confused why the bank wouldn't just allow the house to be bought as is if the seller lowers the selling price to the $135k.

To sum up my question, why does the bank have a say in the condition of the property if it is being bought for what it appraises for? 

Also, with this being my first deal, I am wondering if my agent is trying to pull a fast one on me because I am young and inexperienced with buying. I want to believe she has good intentions because she is a family friend, but I am not ignorant to the fact that at the end of the day, she just wants the deal to go through for her check.