Swimming pool FINAL inspection NEVER closed, HUD home UGH!

15 Replies

I am in the process of buying a HUD home, and the title company informed me that the house I am buying never had the Final inspection closed on the swimming pool and it has been expired for 20 years. The house was built in '95. Beings this is a HUD home Im certain HUD is not going to rectify this. So has anyone dealt with this issue before? Is it too risky going forward and having the building dept. possibly destroy me financially? Im under the impression I will have to reopen the permit, and beings the building codes have probably changed who knows what Im in for. The other inpections during construction phase were complete and signed off on (rebar, excavation), but the final never was. Also, if HUD cant close on their end do they ever refund the EMD or do they keep it because I had to sign their EMD Forfeiture addendum?

can you pull the permit and get the inspector out there before you close?

Medium bc bKatie Neason, Renovation Wranglers | [email protected]

yikes yea considering u could lose ur EMD, i'd get permit pulled and go from there.

wonder how HUD reps will handle this one, going foreward.

how much of the value is included with the pool? Would the numbers still have to work if you have to fill the pool?

@Mike Nelson

My response is two fold depending on whether or not you still want the property or not

I would call the city inspector and ask a general question as to how he/she would handle the situation and go from there. I would personally be very hesitant to awake a 20 year old permit .  Double check you number and get an idea if the deL works sans the pool

If you do not close you are fighting an uphill battle for the EM. I had one with some code violations and I did get my EM back but I new the Asset Manager and talked to them personally

If you did not close HUD would not disclose moving forward. Remember they are the government and they live by their own rules......and then just make them up !

Thanks for the responses. Im weighing the possibilities right now. HUD asset manager responded in email that closing can not take place and they are going to work on resolving the issues. Not sure how far they will get before they tell me "take it or leave it". Mark Ferguson, any thoughts?

Thanks for the help @Greg H.  @Mark Ferguson

The asset manager responded this morning basically saying they dont want to deal with it.  It will become my problem if I chose to close. 

I have a call into the building dept. and was told someone will call me today or by tomorrow to discuss what needs to be done to fix this. So as of now I have no idea the cost or time involved. If they tell me I can fix it without much too hassle and cost, then I would prefer to go forward as it is a nice deal. But if its going to be a nightmare that ties up my money and time , I dont even want to bother. That said, any advice on what to argue to the asset manager about to get My EMD back? Also, is this what I can expect from trying to buy HUD homes? This is my first one and already title issues are killing the deal.... If this happens with the next 3 HUD homes I bid on Ill be out $3000 just like that?! Is this just the nature of the beast with HUD? Greg H. I reread a post you made responding to HUD EMD a while back and you said you got yours back because of HUD not delivering clear title? Was this from the asset manager you knew? Im just trying to think of a savy way to get it back if it comes to this.

@ Greg H.  

Is that the right way to do it?  

HUD is the worst of them to deal with. It's almost like they are trying not to sell you a house. They want the buyer to do everything the seller usually does and if they can't close on time they want to charge you for every day they can't close.

All the permit stuff is on you. You need to ask yourself if it's a good enough deal for all the hassle with those idiot's?

@Mike Nelson

Are you getting a loan or paying cash ?

Like I said yesterday,  I would talk to the inspector in general and not specific to the property just in case the title company relents on the exception. 

How long before your contract expires ?  These issues may take some time to resolve and you may need to file an extension.  You will have to send in the extension fee but it should be waived and returned

If the time comes and the issue cannot be resolved, my position would be that the property didn't close due to HUD not being able to deliver clear title. You might have to climb the chain a little but my guess would be that you will get it back. This is where it benefits being an agent/broker if you are buying HUD homes as most agents are not going to spend a lot of time going to bat for you

In 200+ HUD transactions, I have had a title issue less than a handful of times and all were resolved or I got my EM back so no it is not common

@Account Closed

Maybe I am just a contrarian but HUD being the "worst" to deal with just creates more opportunities for the investors that understand their system and learn how to operate within it. Personally, I find it much more difficult to deal with regular sellers and other agents and dealing with all the emotions and personalities that come with it.

For example, since HUD no longer supplies their appraisal to the buyer and the buyer has to get their own appraisal it has made it more difficult for owner occupants to get an FHA loan on a HUD since the appraiser wants to see the utilities on when he does the appraisal. I bought one last month that had been under contract several times for $40,000-$50000 more than I paid. The city the property is in wanted some items brought up to code at the cost of $2000. Since no modifications can be made on a HUD before closing, no one getting a government loan was going to be able to buy it. I am now in negotiations to sell it as-is to one of those previous buyers

@Greg H. undefined

The property is a cash deal.  

"just in case the title company relents on the exception."  

what does this mean?  Im not quite following, are you talking about the title insurance?  I had already called into the building department and someone is suppose to get back to me today or tomorrow on this issue.  The title company called in as well requesting this info before they notified me of the issue.  This was done before I posted anything.

The contract expires 5/4 . We were suppose to close on the 4/29. The way I feel about it right now is if I can get a pleasing response from someone at the building dept. Ill go for it. HUD doesn't want to lift a finger to deal with it so I will have to take the property with the title issue and fix it myself. If its not going to be a costly and time consuming endeavor, then I will go ahead and close the deal as it is a still a pretty good deal. But if its going to be a nightmare , or I end up having to take the pool out, its not going to be worth it. So basically I'm waiting to see what the building dept. has to say.

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An open permit, in Florida anyway, is not considered a title defect. In fact our FARBAR contracts specifically tells a buyer they must object to such during/as part of their inspection period. HUD investor buy has no inspection period of course, so research prior to placing EM.

@Wayne Brooks

@Mike Nelson

Wayne gave you a Florida specific answer that it is not a title defect which could hinder your ability to sell in the future

Since you are going to go for it anyway, I definitely would want a general answer from the city instead of a property specific answer and then decide how to address it if it needs to be addressed at all.  I just wouldn't want to stir up anything with an inspector until I had an idea of his/her personality and then figure out the best way to work with them if need be

If it is something that needs to be addressed, I would sit back and let HUD address it as long as I didn't have to pay for the extension. You can always just close at the end even if HUD doesn't solve it

Originally posted by @Account Closed :

HUD is the worst of them to deal with. It's almost like they are trying not to sell you a house. They want the buyer to do everything the seller usually does and if they can't close on time they want to charge you for every day they can't close.

All the permit stuff is on you. You need to ask yourself if it's a good enough deal for all the hassle with those idiot's?

 That just means they are not wasting your taxes on admin tasks. But pretty much, those penalties are more of a suggestive than that of implemented. I would have to agree with the idiots part though.