Repair Escrow’s

So how exactly does the repair escrow work? Well that’s a great question!  Let’s go thru this step by step.  We offer repair escrows with any loan program:  FHA, VA, RD, & Conventional. Repair escrows give the buyer the ability to have the work done after closing. Here’s how it works:

  1. Appraisal is completed and the appraiser provides us with a list of required repairs.  Here is a sample of some things the appraiser might ask for.  The bottom line is that anything the appraiser feels is a health or safety issue will be on the list of repairs.  With that said there is no published list of required repair, its all up to the appraiser.
    • This IS NOT a home inspection which would be much more in depth.
    • The appraiser required repairs are the only thing we can set up an escrow for.
    • This IS NOT a renovation loan it is simply a way to complete the repairs that have to be done as part of the transaction.
  2. We send the buyer and real estate agent the list of repairs and contractor packet.
  3. Buyer obtains an itemized bid from a licensed and insured contractor for only the required repairs. Buyers are NOT allowed to complete any repairs themselves.  We need the following back from the contractor:
    • Signed bid
    • Copy of the contractor’s license
    • Completed W-9
  4. Amerifirst reviews and approves repair escrow accordingly. It should be noted that we typically won’t approve bids over $10,000 because the work MUST be completed in 2 weeks.  For large projects Amerifirst offers different renovation loan programs.
  5. Closing on the home occurs and escrow is funded. The key is “where does the money for the repair escrow come from?”
    • Seller could fund the escrow account out of their closing proceeds
    • Buyer could fund the escrow account by bringing additional funds to the closing.
    • Rural Development Only – if the home appraises for more repairs can be financed into the loan up to the appraised value.
  6. Repairs are completed by the contractor.  Once the loan is closed and ownership transferred the clock is ticking and the contractor has 2 weeks to get the repairs completed.
  7. After the work is completed we send the appraiser back out to the property to verify everything is done.
  8. Checks are cut to the contractor.  Here’s what we need before we can cut checks.
    • Final bid from the contractor (if the price has changed from the original)
    • Signed and notarized final lien waiver
    • Buyers authorization to release funds to the contractor (otherwise we have to cut a two party check)

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November Lunch and Learn / Webinar: Low Down Payment Options For Home Buyers

Money, Money, Money, Money

One of the biggest myths out there is that you need a bunch of money to buy a house.  That’s simply not true.  There are a number of No and Low down payment options for home buyers.  On top of that you don’t have to be a first time home buyer to access many of those programs.    During our next lunch and learn we will cover all the different options out there for buyers looking to minimize their down payment.  Over the last couple years its been harder to get a lot of these types of offers accepted.  However, with the market going back to a much more “normal” state it’s not nearly as hard as it was just a few short months ago.  This is the perfect time for Realtors to reconnect with their past customers and get back out there looking.   Come check out this lunch and learn and get a refresh course on low down payment options for buyers!

Hot Topics We Will Cover

Here is a list of some of the things we will cover during the event:

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