So, I'm ready to make an offer on a home. Just about the only thing I don't like is the flooring - 90% of which is OLD carpet that needs to be replaced very soon.

In lieu of just taking the estimated amount for replacing the flooring off of the asking price, I've been trying to figure out how ask the sellers to pay for this either by leaving an amount in escrow to pay my contractors or by having them flat out write me a check at closing.

Apparently there are issues with allownaces in escrow in that many lenders do not allow this and atleast one title company that my realtor has spoken with will have some stipulations to how quickly this money needs to be spent and charges a service fee to deal with this. Looking at this, an allowance may not be the best option.

Are there issues with having a seller simply pay me for the flooring at close? Will lenders take issue with this? Any other options I'm missing? The flooring is something I would have done prior to me occupying the home for ease of installation.

Is it possible that there may be hardwood floors underneath the carpet?

I would keep it simple, offer less than the asking price or whatever price you would plan to offer and give them the reason why.

Or

When you submit the offer, ask that the seller contribute $XX (an estimated cost to replace carpet) to closing.

Or

You can request that seller replace the carpet after you have submitted the offer and during your option period. You can always bail out during your option period for any reason. More than likely they won't do this.

I would bet money that there isn't hardwood beneath the carpeting, but I have not checked for sure.

Regarding just reducing the offer price by that amount, I find it easier to have this money set aside for this particular issue. Before speaking with my realtor, I honestly thought allowances such as this were very common - apparently not the case.

I had also thought about having the seller just contribute towards flooring at close, which is something I need to discuss with my realtor.

Thanks for the ideas and any others would be greatly appreciated.

Aggietaco for your own personal and emotional health do not escrow, take a check at closing, or any other unusual routes.

In the standard TREC contract there is a section, page 4 I think, that has a blank that allows seller contribution. Use that. Estimate the cost and what you want to pay and insert costs there. That will reduce your cash at closing and you should have the funds in hand to do what you want.

Yes as Bott said use the blank on page 5 under Settlement and Other Expenses. You can use that blank for an amount to be paid by seller at closing. If you use that, make sure of 2 things. 1) If you are going FHA route, make sure that you can do this. I know you can up to a certain amount or percentage, but I do not know what this percentage is. 2) Make sure your Realtor explains what the closing costs are going towards when he/ she presents the offer. Because the sellers may want to replace.

If those don't work, then another option is to ask for the floors to be replaced. Make sure you word it so you can choose the floors. They may say that they will contribute X amount to pay for the flooring to be done, but most just go with paying closing costs as that is easy.

[This message has been edited by dannyag07 (edited 6/16/2009 4:35p).]

Danny it is up to 6% for FHA. Conventional starts at 3% but goes up to 6% based on down payment. More DP more % allowed. I "think" it is 4% for VA. I do not do many of those.

I assume you are both refering to the following:

"Seller shall also pay an amount not to exceed $______________ to be applied in the following order: Buyer’s Expenses which Buyer is prohibited from paying by FHA, VA, Texas Veterans Land Board or other governmental loan programs, and then to other Buyer’s Expenses as allowed by the lender."

This value would basically be a check from the seller to me at the time of closing for whatever I needed, in this case, flooring? And this value cannot exceed a percentage of the sale or mortgage price based on the lender?

Taco,

Lets get something straight. You take a check from anyone that is not recorded at the closing with the Title Company pertaining your loan, you could be in violation of Federal Laws.

quote:

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This value would basically be a check from the seller to me at the time of closing for whatever I needed, in this case, flooring? And this value cannot exceed a percentage of the sale or mortgage price based on the lender?

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Not a check. An accounting of both parties final penny that goes each side is done by the title co..

You should be able to get 3% seller contribution on any loan program.

The appraisal is your friend. If it comes up short then so be it. Re-negotiate or get out.

Steve

Whatever amount is in that blank will be credited to your closing costs. Closing costs will be about 3% of the sales price.

Our realtor advised us that things like flooring allowances have become very uncommon.She said that with sellers making so little money off of their homes because of foreclosures and the market dropping the value, no one even asks for them anymore.

I know that we were making so little off of the sale of our house that an allowance for flooring was out of the question. Our feeling was that if the neighborhood's foreclosures were going to be used in the comp values for our area, we were selling our house pretty much "as is." Our carpet was pretty close to totally worn out. It was good quality Berber, but was 10 years old. If our buyers had made demands in that arena, we were prepared to kill the sale and rent the house out instead. Not what either our or their realtor wanted to hear, but nobody pushed for allowances.

[This message has been edited by TxElsie (edited 6/16/2009 10:34p).]

They are still pretty common here in BCS. There haven't been too many foreclosures yet.

Thanks for clearing that up Danny and Steven.

Seller cont. is still common in Austin as well. But I could see more resistance in areas that had a lot of foreclosures as comps.

Good luck Taco! And call me if you want to bid your business.

SB

Your welcome Taco.. Good Luck.