Due to most homes in Los Angeles being relatively old, most transactions tend to have an addendum for repairs and/or credits. In recent years, Underwriters & Appraisers have become very savvy and have began to double-check addendums for the type of repairs. Additionally looking for disclosures by agents of unpermitted items that may show up on the addendums.
Here are examples of how it can affect your deals if we are not careful:
Unpermitted deck or room addition disclosed on addendum for seller credit to buyer
- Appraiser & Underwriter can decrease the properties value based on this new information. If a home was given superior value due to the city view from deck, this can negatively impact the value. The same for unpermitted space.
- Repairs requested by buyer prior to close OR credit for repairs
- Underwriters can require certain repairs to be done prior to close, especially if there are health & safety concerns.
By working together as a team and coordinating the addendums we will be able to avoid additional conditions from Underwriters, as well as potential decrease in value that could kill your transaction. If you are drafting any addendums or request for repairs, feel free to send them to me for review. I am more than happy to help even if Prospect is not funding the loan for the transaction.