Posts Tagged ‘home repairs’

Are you Ready?

March 28, 2011

Okay, I realize we’re still wearing winter coats and scraping the windows of our cars each morning.   But this is Michigan, and that means it can change from a frosty 27° to a balmy 75° in about 12 hours.  By starting now where you can, you will soon be able to enjoy a cold iced tea while relaxing in your favorite lawn chair while your neighbor is still trying to find the back of his garage.  Here are some suggestions to get your home prepared.

□     Check home-safety devises.

Replace batteries in smoke & carbon monoxide detectors

Recharge fire extinguishers

□     Deep clean.

Clean ceiling fans and light fixtures, replacing light bulbs as needed

Clean out the refrigerator and freezer of outdated food items and condiments

Clean, pack and store humidifiers

Deep-clean the carpeting

Clean and air out heavy winter bedding and clothing before storing

□     Maintain HVAC units.

Once the weather does break, turn off your heating system

Change air filters

Remove and clean the filters for your air conditioner and have your unit professionally serviced as needed

□     Think Summer.

Clean and install window screens

Bring out your patio furniture, cleaning and checking for wear or damage as you go

Clean your grill, filling the propane tanks or stocking up on charcoal and lighter fluid

□     Prepare your tools.

Cleaning out and organizing the garage or shed, moving winter equipment to the back, lawn mower and gardening tools to the front

Clean and sharpen trimmers, rakes and shovels

Service the lawn mower and fill gas tank

Hook up garden hoses and replace as needed

If applicable have your underground sprinkler system serviced

□     Walk around the house.

Check the roof for loose shingles that need repair

Clean out the gutters

Check for cracks in the foundation, driveway and sidewalks and repair as needed

Remove insulated covers from outdoor faucets

Clean winter debris from landscaping and foundation

Check lawn for any dead/damaged areas and reseed

□     Enjoy the changing season and warmer weather!

Repair Escrows – a nice solution

December 8, 2010

What is a repair escrow and why would you need one?

When purchasing a home there are certain expectations and requirements for living conditions that must be met.  Most of these requirements address the overall health and safety of the home.  Different loan programs have different standards.  For example, homes purchased through an FHA or Rural Development program require that any and all health and safety repairs be completed prior to closing on the home.  If you are purchasing a home from a private party this can usually be negotiated, scheduled and resolved before the closing date. 

However, making repairs before the closing date can sometimes create a challenge.  For example, repairing brick work on a home can be a bit of a challenge with a foot of snow on the ground.  A repair escrow can easily resolve this challenge; and most lenders offer this option. 

However, a larger challenge can occur with the purchase of a foreclosure home.  With a foreclosure sale the seller is an institution who most likely has never seen the property.  For liability reasons, the seller does not allow access to the property for repairs to be completed prior to closing.  Plus you may not want to make repairs on a home you do not own yet.  Awareness Home Funding is a unique lender that offers you a repair escrow in this situation also.

A repair escrow is a temporary account with funds specifically set aside to pay for any required repairs that a licensed inspector has deemed necessary, and that must be completed within a certain timeframe.

How does it work?

When an appraisal is done on a home, the appraiser will include repairs that will need to be corrected.  Since the appraiser is not an inspector, he may require an inspection be done for certain areas, i.e., roof, electrical, etc.  The inspector will give a detailed report of the problem(s) that will need to be corrected.

Once you have this list of repairs, 2-3 quotes from a licensed contractor must be obtained for each area of expertise (mechanical, electrical, plumbing, general contracting).  The estimated cost of the repairs will determine the amount needed to set up your repair escrow.

An agreement will be drafted to be signed at close.  Funds for the repair escrow will be part of your cash-to-close.  Repairs must be completed within 30 days from your closing date, unless otherwise noted in the agreement.

What happens next?

After you have closed on your home the next step is to start on the repairs.  There may be repairs that are minimal that you can correct yourself, such as scraping and painting, replacing outlet covers, etc.  Please note:  any repairs that do not pass re-inspection will have to be repaired again, which can cost you more money.  It is always best to hire a licensed professional for any repairs that you are not completely familiar with and know how to handle.

Once all the repairs have been completed, contact your Home Loan Specialist at Awareness Home Funding.  We will request a re-inspection of the work required.  You will need to submit any invoices that are to be paid, which will be forwarded to Polaris Home Funding for payment.  Once Polaris has received the approved re-inspection report, invoices will be paid within three to five business days.  Any funds left over from the repair escrow account will be returned.

Additional Factors

  • There is a maximum limit on repairs of $5,000.
  • Individual bids or a combination of bids for different repairs totaling more than $5,000 are considered major structural and must be completed prior to the closing of the loan.
  • Roof “repair” is acceptable, but roof “replacement” is considered major structural and will not be allowed.

 If you have additional questions on repair escrows or any other home loan question, please contact us at Awareness Home Funding.  We are here to help you.