Peninsula, OH · Member since 2017 · 4 posts · 2 votes
I'm having a hard time finding an answer to this question - if a thread already exists, please point me in the right direction!
I'm trying to wrap my head around the point of sale violation process and how repair funds are escrowed (word?) for the buyer. Example: I buy a house that needs repainted to pass - buyer assumes repair - buyer escrows 125-150% of the $5,000 (made-up number) repair cost - DOES THE BUYER NEED TO THEN FUND THE REPAIR OUT OF POCKET while the escrow funds sit untouched?
Also, can any of this roll into an FHA 203K loan?
Has anyone negotiated (successful or unsuccessful) to pay asking or over asking for the seller to assume the repairs if the buyer is short on liquid cash to be tied up in these deals?
Developer · Long Beach, CA · Member since 2016 · 109 posts · 75 votes
8y
Justin May I have only had to deal with POS a handful of times. Most of which I made the seller deliver POS violation free but your miles may vary on that one. I had to deal with a POS in Maple Heights where my GC gave a very low quote and the city said it was too late and I ended up having to deposit 2x the estimate into escrow. But 100-150% is typical and can’t be touched until POS items are resolved and inspected by the city, so yes, you may be using additional funds out of pocket in addition to the deposited funds.
I'm having a hard time finding an answer to this question - if a thread already exists, please point me in the right direction!
I'm trying to wrap my head around the point of sale violation process and how repair funds are escrowed (word?) for the buyer. Example: I buy a house that needs repainted to pass - buyer assumes repair - buyer escrows 125-150% of the $5,000 (made-up number) repair cost - DOES THE BUYER NEED TO THEN FUND THE REPAIR OUT OF POCKET while the escrow funds sit untouched?
Also, can any of this roll into an FHA 203K loan?
Has anyone negotiated (successful or unsuccessful) to pay asking or over asking for the seller to assume the repairs if the buyer is short on liquid cash to be tied up in these deals?
Yes you'd need to fund the repairs out of your pocket while the city held your original funds in escrow. Only when all the repairs are completed to the cities satisfaction will they release your original funds.