"NO" on 1004D. Is re-inspection mandatory?

[poorcustomer]

Hi,

I am buying a new construction and a final inspection was done today. The appraiser completed the Certification of Completion section on 1004D and selected the NO option for "HAVE THE IMPROVEMENTS BEEN COMPLETED IN ACCORDANCE WITH THE REQUIREMENTS AND CONDITIONS STATED IN THE ORIGINAL APPRAISAL REPORT" with a comment stating "At the time of inspection, the improvements have been completed in a workmanlike manner and with quality materials and in accordance with the requirements and conditions stated in the original appraisal report with exception of the landscaping."

The only thing pending in the house is the sod because of rain and i have confirmed that sod is not a local requirement.

Does the selection of NO prevent lender from closing? Will this require a reinspection and an updated Certification of Completion with YES selected?

My lender is insisting that a re-inspection will be required. Please advice.

 

[alebrewer]

If sod was an agreed component of the contract to build, then it should be completed prior to the appraiser giving the property a thumbs up. As I'm sure you know from what you're paying for the sod (and installation), lack of sod could (and probably would) have a significant impact on the overall value of the property.

 

[CGinMN]

Does the selection of NO prevent lender from closing?

It is my understanding that you can close if the lender is willing to set up an escrow account to hold back funds until the sod is completed. Then upon reinspection and satisfactory completion of the sod, they will release the funds to the builder. This is commonly done in northern climates when closings happen in the winter and sod can't be installed due to freezing temps. Others here might know more about this, but I would ask your lender if this is an option.

 

[poorcustomer]

If sod was an agreed component of the contract to build, then it should be completed prior to the appraiser giving the property a thumbs up. As I'm sure you know from what you're paying for the sod (and installation), lack of sod could (and probably would) have a significant impact on the overall value of the property.

They are going to install sod today. Lender is okay with sod delayed but saying that the NO selection prevents us from closing. does the NO selection force a re inspection?

 

[alebrewer]

They are going to install sod today. Lender is okay with sod delayed but saying that the NO selection prevents us from closing. does the NO selection force a re inspection?

It's up to the lender, but generally speaking - yes.

 

[Mark K]

The only thing pending in the house is the sod because of rain and i have confirmed that sod is not a local requirement.

If sod was included in the plans and specs, the appraiser was correct; not his fault its not completed as required.

Personally, I used to add a note that effectively said..."the house is complete but lacking the sod/landscaping" and let the lender make the call. This happens frequently here when the winter weather prevents completion of concrete and/or landscaping. Lenders would escrow $$ for the sod, etc. Escrow amount usually 150% of my estimate of the cost to complete and yes, it would require another inspection, hopefully final this time.

 

[pjkeys]

The appraiser is answering the question about conditions set forth in the original appraisal. Lenders I have dealt with on this issue will usually have the appraiser go and reinspect to make sure the sod meets contract details while some lenders will claim they are not bound by FNMA or other guidelines and will elect to proceed with closing.

 

[Joe Flacco]

It depends on the bank.

 

[Dublin ohio]

Like many have said. It depends on the lender. Around here. It is not uncommon for lender to close with landscaping incomplete. Most of the time it is due to the season (can't landscape during the winter around here) Have had the same with asphalt driveways during the winter. They just set up an escrow account for the unfinished items. Otherwise the house could sit vacant for months.

 

[glenn walker]

They are going to install sod today. Lender is okay with sod delayed but saying that the NO selection prevents us from closing. does the NO selection force a re inspection?

Lender can fund and close on a small escrow hold-back, meaning lets say Cost of Sod is $5,000-$10,000- They simply hold that amount of proceeds to builder in a escrow account until its installed. Then after its installed then lender can send out appraiser to verify its done and send Builder his money . But yes Lender can fund and close right now. We used to do theses all the time, in some areas like where it snows or weather is bad you cannot install certain landscaping until it warms up. The same with other things During Covid-19 supply and labor issues many new homes completed and just waiting say for a few custom doors to be shipped, we didnt hold up a Close of escrow we set u[p a " Escrow Hold back " assuming builder would do it when doors arrived.

Peersonally I am a Bull Dof and I would call escrow telll then to draw up cancellation papers as my lender wont fund. I Guarentee you Lenders phone will be blowing up and they will fund LOL