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Winter storm will chill D-FW home sales

Lenders will require damage inspections before moving ahead with mortgages.

Homebuyers who’ve been scrambling to acquire properties in North Texas are facing another obstacle — the winter storm.

Because of the potential for damage, lenders are likely to delay purchase closings to allow additional property inspections.

Such requirements are common in any region that’s declared a national disaster area.

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Thousands of Dallas-Fort Worth residents have suffered property damage this week due to the record cold, power outages and freezing water pipes.

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Lenders will want an assessment before providing a mortgage.

“We expect to see this as a standard requirement in the coming days,” said Aubre Houck, a loan officer with Fairway Independent Mortgage Corp. “The reason lenders are requiring a final inspection is due to the damage caused by storms such as busted pipes, roofs collapsing due to water damage, etc.

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“We have to ensure prior to closing that there is no damage to the property that requires repairs,” she said.

With a record number of home purchases in recent months, home inspectors, appraisers and other residential industry service providers have been overburdened with business.

Now inspectors will have to make a return visit to properties.

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“Since we are at the mercy of the road conditions and the appraisers’ schedules, we could see this potentially delay closings as this becomes an official requirement,” Houck said. “Also if a property requires repairs, these repairs will most likely have to be completed prior to funding their loan.”

Damage would have to be claimed on the seller’s property insurance policy, and repairs may have to be completed before the purchase is funded.

“A few years ago, we had major hail storms causing golfball-sized holes in roofs,” Houck said. “Lenders required mandatory final inspections in the areas affected and we did see delays in closings while the damage was repaired.

“This is truly in the best interest of the client to ensure they are purchasing a home that is not in need of repair at the time of closing.”

Real estate agents say they aren’t surprised by the inspections.

“This is the new requirement that lenders have to protect their collateral,” said Scott Schueler of Keller-Williams Realty. “It’s not uncommon for lender to do this when a big storm rolls through town.”

Delays caused by the storm could push some home closings scheduled for this month into March.

Keith Boggs of Stonebrair Property Inspections said the closings should not be delayed by much.

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“A report can be generated on the same day,” Boggs said. “If tons people decide they want an evaluation after the weather, it could take a while to get someone out as there are only so many inspectors in D-FW.”

Terry Tremaine, president of the MetroTex Association of Realtors, said the D-FW organization is getting word out to its almost 20,000 members.

“We will be sending out information to our members so they are aware of the FEMA disaster declaration,” said Tremaine, an agent with Century 21 Mike Bowman Realtors. “As a matter of fact, we are scheduling a casualty/loss webinar for our members for next week.

“My business has actually been affected as one of my listed properties had a broken pipe that has delayed closing and will require a second inspection,” she said. “There’s minimal damage thankfully.”