Subject to Repairs

[Alpenglow]

I just inspected a property for an FHA loan and the home was in poor condition. I am trying to determine what items I should require as necessary repairs. I have a few FHA requirements which I am going to call for including installing a fuse box cover, outlet and switch covers, repair of a built-in microwave and dishwasher, and installation of covers on hot water baseboard heating elements. These are safety concerns or FHA required items. The property is in overall fair to poor condition.

It has the following items that I am considering having a cost-to-cure for or requiring as repairs to make the property a C4 condition. I am unsure whether the property would be a C5 without doing these repairs.
- missing interior trim throughout the house
- carpeting in the bedrooms is well past its life and is worn through or missing
- paint and drywall is unfinished or in fair condition in many areas
- one missing interior door
- cracked window
- kitchen cabinets are in fair condition with some missing doors

I estimate these repairs would be around $15,000 to remediate.

Would appraisers consider these issues to still be a C4 home? If I require repairs to make it a C4 should I call for all of these items to be fixed or just some of them?

Honestly, I flip houses as a side business and this looks similar to many foreclosed properties I have purchased.

On top of these items I was unable to measure the back side of the home due to a cow moose and some calves that were in the yard. I had the measurements of the other sides of the home and I am not worried about my measurements being off, but would FHA require me to go back out and do an additional inspection / measurement of the side of the home?

I appreciate any constructive feedback.

 

[Tom D]

a c5 as is. remember the buyer does not have a lot of money, so they do FHA. and the happy buyer now is the unhappy owner who doesn't have the money to fix the house later. FHA is truly fussy about certain items. if the house is basically a square/rectangle you need not measure every side. but you do need a picture of the back. i'm assuming the sale price is taking into account the current condition, and would the required repairs make the value higher. this isn't a simple needs some paint. so be careful about as is value and repaired value difference. i might talk to the lender first.

 

[Terrel L. Shields]

If more than a few thousand in repairs, I want a professional cost to cure list prepared by a third party. I would go back to the client for guidance and tell them there are too many necessary repairs for you to confidentially estimate.

 

[glenn walker]

C-4 Subject to repairs if possible

 

[Tom4value]

Based on your description, the property does not meet FHA guidelines as is and would need your repairs. For as is condition, it is probably (only you can determine that) if it is marketable. If not, it is definitely a c5 and requires a call to the client since they cannot sell the loan with a c5 rating.

 

[RSW]

Sounds like the fair-poor condition would fall under the security of the 3Ss. Make the report subject to bringing it up to a C4 or higher.