Federal Pacific Panel Prevents House Closing
- Thread starter Fordiesel69
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That’s like saying people get in car crashes every day, so why bother wearing your seatbelt?
Right. How many insurance companies are refusing coverage for Square D or Eaton panels?
Plenty of people don't wear their seatbelts.
Maybe seller got another offer and is looking for a way out and to keep your friends earnest money?
If that isn’t the case, offer them a bit more to let the electrician replace the panel prior to closing. If your friend doesn’t have a few thousand to get this done, then buying an as-is house is probably not the right choice. Can they put it on a credit card?
If that isn’t the case, offer them a bit more to let the electrician replace the panel prior to closing. If your friend doesn’t have a few thousand to get this done, then buying an as-is house is probably not the right choice. Can they put it on a credit card?
There is way too much speculation and way too little information to give rational advice on the subject.
1. First off the sellers were ok with an FHA mortgage, first red flag for an "as is" sale. FHA mortgages are and can be very restrictive to property condition. I was an agent in an affluent area of the country who represented homeowners, it was very rare my homeowners would accept an offer with FHA financing.
2. I dont see how the buyers can lose their downpayment. Mortgage contingency is common, if the bank will not write a mortgage buyers get their downpayment back, simple stuff. Doesnt matter if it is "as is" sale or not. Actually all sales are "as is" in the strict sense of the word. Though most contracts give a time frame to have a professional inspect the property AND a mortgage contingency. Unless for some silly reason buyers did not hire a lawyer and allowed the mortgage contingency to be stricken from the contract. IF this is the case, this is the buyers negligence.
3. There is more to this story, there has to be because this deal can not be posted with just a few lines. Clearly the sellers may have other offers or realized they can get more money based on the OP post that the house was a great deal. That would explain their reluctance to move ahead with the sale, clearly their right.
4. Typically what would happen with a headstrong seller in this case and if the buyers wanted the house. The buyers would pay to upgrade that breaker panel at their expense by reimbursing the seller at closing or addendum to the contract to upgrade it. If the sellers do not want too, then clearly they have no motivation to sell the house to the buyers. If the buyers can't afford to give them the money, then clearly they cant buy the "as is" house. Dead house deal, buyers get their downpayment back, move on.
1. First off the sellers were ok with an FHA mortgage, first red flag for an "as is" sale. FHA mortgages are and can be very restrictive to property condition. I was an agent in an affluent area of the country who represented homeowners, it was very rare my homeowners would accept an offer with FHA financing.
2. I dont see how the buyers can lose their downpayment. Mortgage contingency is common, if the bank will not write a mortgage buyers get their downpayment back, simple stuff. Doesnt matter if it is "as is" sale or not. Actually all sales are "as is" in the strict sense of the word. Though most contracts give a time frame to have a professional inspect the property AND a mortgage contingency. Unless for some silly reason buyers did not hire a lawyer and allowed the mortgage contingency to be stricken from the contract. IF this is the case, this is the buyers negligence.
3. There is more to this story, there has to be because this deal can not be posted with just a few lines. Clearly the sellers may have other offers or realized they can get more money based on the OP post that the house was a great deal. That would explain their reluctance to move ahead with the sale, clearly their right.
4. Typically what would happen with a headstrong seller in this case and if the buyers wanted the house. The buyers would pay to upgrade that breaker panel at their expense by reimbursing the seller at closing or addendum to the contract to upgrade it. If the sellers do not want too, then clearly they have no motivation to sell the house to the buyers. If the buyers can't afford to give them the money, then clearly they cant buy the "as is" house. Dead house deal, buyers get their downpayment back, move on.
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Reading between the lines of what OP posted, I don't think a realtor was involved in drafting up the sales agreement.
Did they KNOW you had this ?
That seems dumb. FHA inspections aren't that stringent and even the things they may flag may be easily and inexpensively corrected. I remember our inspector pointed out that our back steps don't have a handrail and the FHA inspector can flag that (he didn't though - maybe it has to be more than 'x' feet height or something) or a previous home, a window pane was cracked. That was flagged but the seller replaced the pane and it was good to go.
On the other hand, if it was a seller's market at the time or it was a very desirable area, they could impose whatever restrictions they wanted.
It's not dumb, Long Island is always a strong sellers market.
As people get ready to move on with their life, they think their house is sold, then comes the FHA... oops, says you need a railing installed on those cement stairs. It's not always as simple as "a window pane is cracked". It can also be an outdated electric panel which this thread is about.
No, this has nothing to do with FHA. They can't find a company that will insure it and without insurance, the bank won't write the mortgage.
Good post, I got thrown off by post #17 from the OP who said it won’t pass FHA approval.
No, this has nothing to do with FHA. They can't find a company that will insure it and without insurance, the bank won't write the mortgage.
I will stick to one of my posts where I say there is more to this story and not enough information. A testimony to the ridge FHA inspection process and makes me ask how did they buyers know it would not pass? FHA is the lender not an insurance company.
Lost track but I moved/represented 10’s of millions in real estate transactions in the NY metro market, actually actually 100+ million and NEVER had an insurance company inspect an electrical panel.
A home appraiser for the BANK would flag severely outdated electric panel and require up grade, typically old glass fuse panels. Never an insurance inspection took place inside a home. It is a bank appraiser who walks through the home.
To be clear I really mean the word = never an insurance company
Post in thread 'Federal Pacific Panel Prevents House Closing'
https://bobistheoilguy.com/forums/t...el-prevents-house-closing.408255/post-7634579
I still have to question what took place. Bottom line we had a buyer and seller not understanding the process of handling this on their own.
There is something missing with the information posted, I am not saying the OP is wrong. I am saying this is a hard post to properly address without knowing how this whole deal came about and conversations that took place and how did a home insurance company get involved going inside a home.
Maybe the buyer got scammed? I don’t know that either. Lesson learned (tough one) buyers should have had someone represent them or noticed the red flag when sellers sought to deny them representation.
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Short version of my overly long post above.
No, this has nothing to do with FHA. They can't find a company that will insure it and without insurance, the bank won't write the mortgage.
Bank appraisers go into homes when a mortgage is applied for, not insurance companies.
A bank appraiser makes sure it is a livable home right down to the number of bedrooms, baths, stove/oven/range
A bank appraiser WILL look at and photograph the electric panel, A bank will deny a mortgage unless an outdated panel is upgraded. After all it is a bank buying the home for the buyer to pay them back and in reality the bank owns that home until the mortgage is satisfied.
I’m not saying the OP is wrong but something is missing in the information given. I never had an insurance company enter a home doesn’t mean there isn’t a reason that I never knew of in my career that one might
I agree, the only on-site visit I've ever had from an insurance company was an exterior walk about a year ago, local broker only interested in confirming exterior features, outbuildings, etc.
That alone was interesting to me, because any national company doesn't have boots on the ground to even go this far for an exterior visual inspection.
I agree with both of these statements. It's other people who imply that insurance people are always doing these extensive, in-depth inspections with fine-tooth combs and it's laughable. These are the same people who suggest if you replace an electric outlet without a permit or it's not done by a "licensed electrician" that your home WILL burn down and insurance will happily stamp your claim "DENIED" !
I have had one situation where an insurance agent I didn't now (new to this tow apn for my property purchase) came and did a short inspection of the house. He asked me to fix a couple of items including a porch rail because of four steps up to the back stoop. It was an 80 year old house.
Every one of the "bank appraisers" you discuss were certified and licensed house inspectors. Don't know if this is a regional thing or not. I own properties in Missouri and Kansas and the bank-chosen house inspectors were used each time when I needed a loan.
That would make sense. Bank sends appraisers to the house for this purpose. Not sure about certified but they are there to confirm the house structure, specific rooms, types of rooms and house boundaries to what is on file with the county accessors office.
Any structures added on that have not received permits to construct will be flagged as illegal until proper permits and inspections are done. While they are there, they will almost in every case take a photo of the electric panel. Bottom line these are working for the bank, not an insurance company.
Typical home insurance companies will do a walk around the outside of the home and that is all. In our nation and on a national/International forum like BITOG of course there will be "one off stories" out of the millions of residences in the USA>
I changed Insurance companies a couple of years ago and they sent a guy out to document some things . He took a picture of my breaker panel .
Curious how that works. We bought a shed and filed for the proper permit from our city. I also told our insurance company about it and they added coverage (or my policy included coverage already, maybe if it's under a certain size). When I look at the county's records though, there's nothing about it. They don't show an aerial view either, just a "sketch" of the outline of the house. There is a "Permits" link but there's nothing there either. Permits are issued by the city anyway, not the county, so they clearly don't share info.
Interesting because I decided to look at house my parents owned in Fayetteville NC city limits (house built new 1961), and add-on building permits were are listed, including the original one for the house.
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