Home Offer

Our lease ends at the end of August. We have been renting since we moved down to Tampa from Virginia. Given the great mortgage rates that we have seen over the past couple of months, Jennifer and I decided that it would not hurt to look. Plus, it has been frustrating renting. There are a lot of repairs and improvements that we would make to a home that we owned, but can not justify doing to a rental house and landlords always take the path of least expense, even if it is aesthetically hideous.

After reviewing our finances we decided that the best option for us is the FHA loan. Which it seems would be a great program. The buyer of our Virginia house used FHA to purchase the home. The only drawback was that the FHA inspector found "deficiencies", which were very minor in nature, but absolutely had to be repaired before the bank would provide financing, which meant that Jennifer and I had to hire out repairs remotely instead of putting money into escrow to cover the costs.
So why is this relevant?
We found a home that we are interested in and made an offer. It is a short sale, which brings its own basket of hassles. We finally got approval from the seller's banks (yes there are two) for our offer price. We put into the contract that we would have inspections within 10 days of contract execution, which ended on June 14. The problem was, that the water was not turned on at the home, so we requested the water be turned on and started scheduling inspections after the water was on, which put our inspections on the Friday before the contractual end of inspection period. This is where the FHA program comes into play. During the inspection we discovered the typical problems you would see in a decade old house, but one issue which was an eye catcher was an area of wood rot in the dining room base boards.

Upon seeing the wood rot, my immediate fear was that there were termites. When the WDO inspector looked at the area, small insects came crawling out. I thought my fear was confirmed. It turned out that they were just ants. The problem turned out to be moisture getting into the house from the outside, where water was accumulating near the base of the wall and getting inside through settling cracks in the cinder block walls. It is a relatively simple fix on the walls, dig the dirt up around the base of the wall and apply concrete sealant, then apply sealant inside as well. The landscape must also be modified to keep water from pooling, but this can be addressed with a day of shoveling to create a slope away from the house and installing a flower bed around the house where water can seep into the soil instead of running on the surface and pooling. I am worried that the FHA inspector will see this and think the same thing that I did at first and stop financing.

A few other problems that came out during inspection were:

1. Rotten boards under the shingles in two places within the garage. I will have to hire a roofer to make the repairs. Our Realtor has scheduled someone to come out and provide us with an estimate.
2. The AC is not working efficiently and the intake is full of mold. We will have to have the inside air handler serviced and the whole thing cleaned.
   
3. Minor items i.e. missing shower head, burned out light bulbs, etc.
4. Floors. We knew going in that we would have to replace the carpeting. The house was actually a rental for a short time, probably so that the owner could stay above water. The renters trashed the carpeting.

We have had to go back to the seller the request an extension on the inspection period, so that we can discover what these repairs will cost us. So, for the next few weeks, Jennifer and I will be on pins and needles while we wair for repair estimates and the FHA inspector.