Facing lender-required repairs in California? Trust me, you’re not the only one dealing with this headache. Whether you’re trying to sell my house fast in Los Angeles or somewhere else in the state, getting a handle on these requirements can save you from a lot of frustration down the road. Let me break down what these repairs actually mean, why lenders care so much, who gets stuck with the bill, and some ways you might be able to sidestep the whole mess.
TL;DR:
- Lenders require repairs to protect property value and safety.
- Common fixes: peeling paint, unsafe wiring, missing alarms.
- Sellers often pay for repairs to keep sales moving.
- FHA and VA loans have strict safety and structural rules.
- Cash sales avoid most lender-required repairs.
What Exactly Are Lender-Required Repairs?
So here’s the deal with lender-required repairs—they’re basically fixes that your buyer’s mortgage company insists on before they’ll hand over any money. Think of it as the lender protecting their investment (and, okay, the buyer too). If someone’s getting an FHA loan, for instance, they tend to be pretty picky about health and safety stuff. Conventional loans? They might cut you some slack. But either way, you’re probably looking at fixing things like that sketchy wiring in the garage or the roof that’s been leaking since last winter.
California’s market moves fast. Really fast. And these repair delays? They can send buyers running to the next listing. If speed is what you’re after, you’ll want to know what you’re up against before that first inspection happens.
Common Examples of Repairs Required by Lenders
- Repairing or replacing damaged roofing
- Fixing unsafe electrical systems
- Ensuring functional smoke and carbon monoxide detectors
- Addressing foundation cracks
- Removing peeling lead-based paint
It’s not just about making things pretty—these repairs touch on safety regulations, legal stuff, and maintaining what the property’s actually worth.
Who Bears the Cost for Lender-Required Repairs?
Here’s where things get interesting (and sometimes tense). Usually, sellers end up footing the bill because, well, they want the sale to go through. But what happens if you dig in your heels? The buyer might just walk. Or worse, they’ll come back asking for a price reduction that’s way more than the repairs would’ve cost. Say an FHA inspector finds exposed wiring—that’s got to be fixed, period. No wiggle room. And these fixes? They could push your closing date back by several weeks, which is why hammering out who’s paying for what early on seems to make a difference.
How Does the FHA Inspection Checklist Affect Seller’s Responsibilities?
The FHA checklist is… thorough. They’re looking at safety, security, whether your house is going to fall down—that sort of thing. Got a wobbly handrail on the stairs? That’s a problem. Toilet doesn’t flush properly? Problem. Window won’t stay open without a stick propping it up? You get the idea. If the inspector finds these issues, you’re fixing them before anyone’s signing papers.
Worked Pricing Example
Example: AS-IS value: $300,000. Estimated repairs: $20,000. Closing costs/fees: $5,000. Target investor profit: $25,000. Offer = $300,000 – $20,000 – $5,000 – $25,000 = $250,000. This tradeoff offers speed and certainty but reduces seller equity.
Can You Avoid Making Lender-Required Repairs?
Actually, yes—there’s a way around this. Cash buyers, especially investors, typically don’t care about lender requirements because, well, there’s no lender. They’ll often take your house as-is, peeling paint and all. This could work if you need to sell my house fast in San Diego or other California cities. Sure, you might not get top dollar, but you skip the repair hassles, the back-and-forth negotiations, and those nerve-wracking contingencies.
What Are the VA Loan’s Specific Repair Requirements?
VA loans come with their own set of rules—minimum property requirements, they call them. The idea seems to be ensuring veterans get homes that are actually livable. Cracked windows? Those need replacing. Roof older than your teenager? Might need work. That ancient knob-and-tube wiring? Definitely getting updated. It’s all about making sure our veterans aren’t buying money pits.
How to Navigate Conventional Loan Repairs
Conventional loans tend to be a bit more relaxed than FHA or VA, though “relaxed” is relative. They still want the house to be safe and structurally sound. And in California? Some lenders appear to be particularly interested in earthquake retrofitting—those anchor bolts aren’t just suggestions anymore. Check out our full guide on selling a house fast in California if you want the nitty-gritty on local quirks.
You might want to review HUD’s guidelines on conventional loans to see what could potentially come up.
Dealing with FHA and Conventional Loan Appraisal Differences
Here’s something I’ve noticed: FHA appraisers seem to care more about whether you can actually live in the house safely, while conventional appraisers focus more on what it’s worth. FHA will flag that peeling paint in a heartbeat (especially in older homes—hello, lead paint concerns). Conventional? They’re more likely to worry about that crack in the foundation. Want more details? This guide on home appraisals breaks it down pretty well.
Finalizing the Loan: Completing Repairs Before Closing
Once repairs are on the table, the clock starts ticking. You’ve got the inspection, then the lender looks it over, they send you a list of demands, you scramble to get everything fixed, and then—fingers crossed—the re-inspection goes smoothly. Want to speed things up? Find contractors who actually answer their phones (harder than it sounds), keep everyone in the loop, and maybe check in on the work yourself. Though honestly? If time’s really tight, selling to an investor to sell my house fast in San Jose starts looking pretty appealing—no repairs needed.
Seller Checklist
- Review inspection report promptly
- Agree on who pays for each repair
- Hire licensed contractors
- Schedule repairs quickly
- Keep lender updated
- Verify repairs before re-inspection
FAQs on Lender Required Repairs
Q: Can I negotiate repair costs with the buyer?
A: Absolutely. Sometimes buyers prefer a credit at closing instead of having you do the actual repairs. But the lender has to be okay with it, and some loan types are pickier than others.
Q: Are cosmetic issues part of lender-required repairs?
A: Not usually. That ugly wallpaper in the bathroom? The lender probably doesn’t care. They’re more worried about whether the toilet actually flushes.
Q: How long do I have to complete repairs?
A: It varies, but generally you’re working within your closing timeline. FHA loans can be particularly strict about deadlines—miss them and the whole deal might fall apart.
Q: What if I can’t afford repairs?
A: This is tough. You could try renegotiating with the buyer, look into a repair escrow (though not all lenders allow this), or consider selling as-is to an investor to sell my house fast in Sacramento.
