We recently made an offer on a house for $300,000, which was $1000 over the asking price. After this preliminary offer was accepted by the seller, our sewage inspector found that the sewer line needed approximately $10,000 worth of repairs. The seller agreed to pay for these repairs through an escrow holdback. Our realtor negotiated the holdback and she also recommended the sewer repair company and got the repair estimate. She also advised that we do not talk to our lending officer about this arrangement (for some reason?). She did apparently talk to the lender at some point, as they wanted us (buyer) to put $5,000 in escrow for the sewage line, in addition to the $10,000 the seller would pay in hold back. I imagine the lender was concerned the actual costs of repair may turn out to be higher than $10,000. Whatever is not paid to the sewer repair company of the $5,000 will be returned to us.
Since then, the lender’s appraisal came back as $318,000. While we were initially elated, the lender has since told us that the high appraisal means the property will be sold as is, with no additional repairs made by seller. Our realtor told us that as far as she knows the sewer line deal is still on, but the lender is trying to get it approved by the underwriter. I do not recall signing any docs regarding the $10,000 holdback, but my husband does. We can’t find these docs in our email.
To be frank, I have no idea what any of this means or whether or not this is an unusually or questionable arrangement. I was also under the impression that the seller would not learn about the appraisal and so they presumably would not have a reason to renege on the original arrangement. Has anyone been in a similar situation or does anyone have any thoughts? Thank you!