Our closing was scheduled for the 17th of July. The deal fell through. FHA would not grant the loan because the well is located in the Right Of Way and not on our property. We have to move it about five feet. We live in a very rural area. There is no way that road will ever be widened, but as our lawyer stated, the FHA is run by a bunch of buffoons.
So we are going to spend between $5,000 to $7,000 to fix the problem and hope our buyer does not back out. We can get this new well done in less than two weeks.
Suffice it to say, we are not happy campers. But we are being positive and optimistic. I'll keep you all posted.
Speedhitch said
09:34 PM Jul 18, 2009
Hang in there I heard that Fat Lady has a lovely voice....you'll like it when she starts singing.
2 4 d hwy said
08:26 PM Jul 21, 2009
Speedy is right. All is not lost. See you in October.
Howard said
10:30 AM Jul 22, 2009
Hey Fox,
Sorry about the issue you are having. I just wanted to make a couple of points and suggestions.
First, when selling a home in a good market, I would always take an offer from a buyer getting a conventional loan over someone getting an FHA loan (all else being somewhat equal). The FHA inspections often cause problems and FHA loans usually take longer to get through approval.
Now, with that said, in down markets, you take what you can get.
In your case, it sounds like you have a title issue that would have been a problem with any loan, not just FHA. Unless a title insurance company would be willing to "insure over" the problem, most lenders would not give a mortgage without the well being moved.
Unfortunately, "insuring over" the problem is an issue between the lender and the title insurance company and you probably wouldn't have the influence to get that done. Still, I'd at least ask the question: "Has anyone talked to the title insurance company about insuring over the well issue?" The title insurance company looks at the potential risk of a claim arising from the well being in the right-of-way. If an underwriter determines the risk is low, they might "insure over" and make the problem go away. A quick, easy, no-cost-to-you solution.
If the title insurance company won't "insure over" because they think the risk is too high, they might take a document from you to "insure over". For example, rather than spending your money upfront, you could make a promise to pay for the moving of the well if it becomes necessary during the life of the loan to the buyer. You could put a limit on the amount you'd be willing to pay. It'd be a longshot, but it could make the closing happen quickly and you might not have to pay out anything at all in the long run.
Failing those options, going to the expense of moving the well will probably be the fastest solution. But I'd make sure you still have a deal if you do that. I'd get it in writing from the buyer and the lender that they will both go through with the transaction if you pay to have the well moved.
If you cannot get such guarantees, I might pursue a different approach before I went to the expense of moving the well. You could at least try to see if the owner of the "right-of-way" (I'm assuming there is a legal easement owned by someone), might be willing to abandon the easement (at least where the well exists) and deed that small portion of the property to you. It's another longshot and would probably take time, but it would likely be a much cheaper solution if you could pull it off and it would resolve the issue with future buyers.
Anyway, those are some thoughts. Of course, those are thoughts without benefit of really knowing the details. But see if your lawyer thinks any of them are viable. Oh, if the lawyer is not a real estate lawyer, get some advice from a real estate lawyer. Trust me on that one.
Happytrails said
07:56 PM Jul 22, 2009
Fox,
So sorry to hear about the "hang up." Sellling in this market has become a nightmare.
Just hang in there, the "fat lady" has a wonderful song to sing and we are sure you will love the song!! Keep us posted.
Terry and Jo said
09:49 AM Jul 25, 2009
Hey, Fox.
Try to stay positive. At least you have someone that has an interest in your home. Jo and I have had ours on the market for just over a year and not even had a nibble.
Don't lose heart, my friend.
Terry
foxriverguy said
04:33 PM Jul 25, 2009
We are making some progress. The soon-to-be buyers are now renting the house. The new well was drilled Friday and will be in service by mid-week. New surveys and water tests have been ordered.
Things are lookin' better.
Our closing was scheduled for the 17th of July. The deal fell through. FHA would not grant the loan because the well is located in the Right Of Way and not on our property. We have to move it about five feet. We live in a very rural area. There is no way that road will ever be widened, but as our lawyer stated, the FHA is run by a bunch of buffoons.
So we are going to spend between $5,000 to $7,000 to fix the problem and hope our buyer does not back out. We can get this new well done in less than two weeks.
Suffice it to say, we are not happy campers. But we are being positive and optimistic. I'll keep you all posted.
Hey Fox,
Sorry about the issue you are having. I just wanted to make a couple of points and suggestions.
First, when selling a home in a good market, I would always take an offer from a buyer getting a conventional loan over someone getting an FHA loan (all else being somewhat equal). The FHA inspections often cause problems and FHA loans usually take longer to get through approval.
Now, with that said, in down markets, you take what you can get.
In your case, it sounds like you have a title issue that would have been a problem with any loan, not just FHA. Unless a title insurance company would be willing to "insure over" the problem, most lenders would not give a mortgage without the well being moved.
Unfortunately, "insuring over" the problem is an issue between the lender and the title insurance company and you probably wouldn't have the influence to get that done. Still, I'd at least ask the question: "Has anyone talked to the title insurance company about insuring over the well issue?" The title insurance company looks at the potential risk of a claim arising from the well being in the right-of-way. If an underwriter determines the risk is low, they might "insure over" and make the problem go away. A quick, easy, no-cost-to-you solution.
If the title insurance company won't "insure over" because they think the risk is too high, they might take a document from you to "insure over". For example, rather than spending your money upfront, you could make a promise to pay for the moving of the well if it becomes necessary during the life of the loan to the buyer. You could put a limit on the amount you'd be willing to pay. It'd be a longshot, but it could make the closing happen quickly and you might not have to pay out anything at all in the long run.
Failing those options, going to the expense of moving the well will probably be the fastest solution. But I'd make sure you still have a deal if you do that. I'd get it in writing from the buyer and the lender that they will both go through with the transaction if you pay to have the well moved.
If you cannot get such guarantees, I might pursue a different approach before I went to the expense of moving the well. You could at least try to see if the owner of the "right-of-way" (I'm assuming there is a legal easement owned by someone), might be willing to abandon the easement (at least where the well exists) and deed that small portion of the property to you. It's another longshot and would probably take time, but it would likely be a much cheaper solution if you could pull it off and it would resolve the issue with future buyers.
Anyway, those are some thoughts. Of course, those are thoughts without benefit of really knowing the details. But see if your lawyer thinks any of them are viable. Oh, if the lawyer is not a real estate lawyer, get some advice from a real estate lawyer. Trust me on that one.
Try to stay positive. At least you have someone that has an interest in your home. Jo and I have had ours on the market for just over a year and not even had a nibble.
Don't lose heart, my friend.
Terry