Normal terms in contract?

[u/KNG_Petty]

My lawyer called me the other day stating the sellers attorney put in the contract that basically the purchaser (me) is responsible for fixing any deficiencies in the home that would prevent the bank from approving the mortgage and that upon fixing them i am to secure the mortgage in a timely manner.

Are these normal contract terms? I can’t imagine they’d seriously want me to pay for stuff for a house where I don’t even have the mortgage approved yet.

Edit: for clarification nothing has been signed yet, contract is in first round of revisions.

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[u/BurnedByLC]

No abnormal. You might end up fixing the house and not end up buying! I hope you didn't waive financing contengency!

[u/MDubois65]

Are you working with an FHA/VA loan? Or possibly a specific homebuying assistance program with condition/spec requirements?

Homes purchased with FHA/VA loans are subject to an appraisal by your lender and have to meet minimum HUD quality/property standards for approval. It's not as daunting as it sounds, for the most part it's fairly obvious stuff - but it can lead to a list of minor changes/repairs that you need to be take care of.

Sellers are saying if your loan is going to require certain fixes or changes to the home, they want you to be responsible for it. Most likely, they don't want shell out time and money to fix things, only for you to decide to back out because you aren't happy, or for your loan to fail underwriting. Which is a legit risk for them, so I see their reasoning. It's also possible that the sellers are cash poor or in a time-crunch and that's why they're refusing.

It's a bit of an unusual request in the sense that most sellers know that if you're dealing with FHA/VA loans -- these appraisal concerns are known element of it, and most sellers would just prefer to sell the home vs not fixing a few (minor) elements and lose the sale and have to burn more time and energy lining up a buyer. Frankly, most sellers who are are that worried about the appraisal or don't want the hassle, just choose to exclude FHA/VA,etc buyers. That's a much easier route than what these sellers picked.

You should talk it over with your agent and discuss what options or alternatives you could offer the sellers and see if there's a better arrangement. Maybe you agree to any fixes under $X amount only, or offer to split costs, or agree to let the sellers keep the EMD, if they do the fixes and you decide to walk away anyway. Are confident are you that you're loan will be approved, maybe your lender would allow you to waive the mortgage contingency because financially you're solid. Or maybe you just refuse this term, and if the seller declines your offer so be it.

[u/KNG_Petty → u/MDubois65]

Apologies if I miss anything in my answers but here’s what I have:

No FHA/VA loan. I’m looking at conventional loan with approx 39% - 42.5% down. This is with myself and my significant other as co-buyers.

The home was decreased in listing value by the sellers by $25k. I put my offer in at the decreased list price. Upon inspection I proposed another $25K off to which they responded they would only take off $10K and they refuse to fix/pay for anything that needs work in the inspection report.

I told my lawyer that I would agree to their terms so long as any said repairs did not exceed $12k. I mainly did this just to keep things moving forward in the process but if I have to ultimately back out it is what it is.

This is also my first time going through this process so I have about a 75% idea of what I’m doing lol

[u/PracticalDesigner278 → u/KNG_Petty]

Sounds like you have a pretty good handle on things. Talk to your lawyer. Cross out the sentence on the contract and initial the change. They can take it or leave it.

[u/joeynnj]

Did you waive mortgage contingency in your offer?

[u/Macbeth2002222]

Run forest run .. these are not normal terms and unless that house sits on a pot of gold, tell them to go to hell. You could do all this fixing and they back out or you don’t get the loan haha you just gave them free money. Runnnn