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February 27, 2013

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I seems very clear to me.

The lender should be aware of the corrections or potential corrections necessary on the property before closing

This appears to be a logical manner in which to resolve the Inspection Objection.

Thanks for the information.

If both parties can agree that is best, but if the seller reneges then get the court involved and cause a cloud on the title.

In a case where repairs/ improvements are made, I would see the lender as encouraging! The buyer getting more than they bargained for.
In the case study, it appeared an insight into keeping disclosure's from being made to a lender. Sort of a back door approach... This could be problematic.

I read a little into the article of the dangers of a typical "wish list" in alerting a lender to what appears to be a deficient property, when it is merely a wish list.
ei: seller to replace scratched (but unbroken) window. repaint entire interior, replace entire house carpet, etc. etc... I have seen some crazy requests!

I think the Inspection is important for any buyer, lender and seller. Trying to negotiate and resolve issues are huge between parties. Yes, let the lender know as soon as possible and keep them posted on the resolution to keep the contract going on schedule as close as possible or terminate the contract.

Is the seller allowed to withdraw from and terminate the contract upon receipt of an inspection objection form?

In parallel, should an inspection objection form be submitted by a buyer only if the buyer deems it likely that they would want to terminate the contract if the subject of the objection is not resolved?

The Seller's receipt of the Objection begins a new round of negotiations to determine if the parties can come to an agreement on repairs or credits that must be made prior to the closing.

The seller cannot unilaterally withdraw from the Contract at this point, instead choosing to negotiate or not based on the requested repairs and credits from the buyer.

As in any negotiation, if the buyer doesn't ask then they certainly will not receive. So, asking for what the buyer needs to have repaired can be combined with the termination preparation if they are rebuffed by the seller, or it can be just an opening volley in this round of negotiations. Skilled negotiators will find a happy medium while trying to get the parties to come to an agreement.

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