Questions regarding FHA appraisal.

[Webbed Feet]

My wife and I recently purchased our first home with an FHA loan. There were some minor issues that were all paid for by the bank.

You need to clarify what you are saying. The "Bank," or your lender for your loan, would not pay to correct any issues at all. So I have to guess this property was a "Bank Owned" foreclosure and when you post "Bank" you mean the "Seller." And this is an issue, if I am correct stop thinking of them as a "Bank" and start thinking of them as a "Seller." It may not be clear why I am saying this, but this is regarding liability and false representations by a seller.

Initially we had a report of heating / ac issues. We offered to meet the bank (seller) halfway on repairs, but they said they had taken care of it.

Did you document that? How was this communicated to you and specifically by whom? Who was, or is, representing YOU in this transaction?

Upon move in our home was 45 degrees, the heater ran for about two hours and got the house close to 50 degrees. We had the home insurance company (American Home Shield) send out a heating tech to check the heater out.

Again..... "We had?" Who is representing you? You did this without a real estate agent?

He said that it had been rigged to run with the heat strips only, and that it was wasting money and not safe.

Seller involved in hiring people that did unsafe things to the property. If you had representation they should be all over that one.

Most of the minor repairs dealt with fungus from leaf litter on the deck. The pest company also installed a new hot water heater.

What in the..............? Why would a "pest company" be involved in replacing a hot water heater? Are you saying California does not have plumbers?

They claimed that the old working unit was leaking and replaced it with a new unit. When we moved in we had no hot water. We had a electrician come out to turn it on for us and found that the wiring had been butchered.

Duh! What a surprise! I am having LOTs of trouble with pest company employees replacing hot water heaters. You should be too. If you check, I bet a permit was required to replace that item. Bet none was obtained. Hence no safety inspection by public inspector, hence codes and regulations broken.

Upon calling the pest company we were told that they put the new water heater in but never tested it. They will not tell us who did the job. There is no paperwork concerning this job and they refuse to fix the issue. When the initial appraisal was done there was hot water and now there is none.

Gosh, what a surprise! Don't suppose they broke all sorts of laws, codes, or regulations do you? Why don't you find out?

What are our options? We really like the home and have invested two thousand dollars into it and don't want to lose it. Should we contact a lawyer, FHA or is the seller responsible?

Again, don't you have real estate representation? If the seller (bank that owned what we called REO) allowed the seller's listing broker to act under what is called "Dual" agency to represent you and the seller both, that listing broker should be going to bat for you over this stuff.

Thank you for your time.

Robert

Thanks for the quick replies as this is becoming a time sensitive issue with pipe freezing temperatures on the horizon. The seller sent out another electrician to check our hot water heater. We now have our third diagnosis and are just hoping someones going to pony up... In regards to the FHA when the heater first presented issues during initial inspections we were told the loan would not go through. It seems FHA requires the homes to be move in ready with a minimum household temperature of 50f; and running hot water. Which seems to leave us with very few options, fix heater or blow whistle and lose money and time invested in home. Hopefully I'm overlooking a much better solution as neither option is attractive. Once again thanks for your time and insight.
Robert

Did you not obtain the services of a home inspector? No, I don't mean simply a real estate appraiser hired by your lender for a real estate appraisal, as that is NOT a home inspection. Who is representing YOU in this purchase? Why do you not have a real estate broker to be asking these questions and taking care of these things for you? How did you get into this transaction with no representation?

 

[Webbed Feet]

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I don't do FHA work, so I have no idea what it involves. It is unlikely the seller is responsible, unless they intentionally misrepresented something...caveat emptor is typically the rule when buying real property.

<.....snip.....>There were some minor issues that were all paid for by the bank. Initially we had a report of heating / ac issues. We offered to meet the bank halfway on repairs, but they said they had taken care of it. <.....snip.....>

Oregon Real Estate Law:

Actual fraud occurs when the person making the representation either knows that it is false and intends to deceive or is ignorant as to its truth or falsity but makes the representation anyway.

Fraud in the inducement is a misrepresentation which induces or convinces someone to enter a contract such as a misrepresentation as to the condition of a structure which induces someone to make an offer to buy.