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New thing on the REO front. Just got a contract that requires all inspections to be done prior to making an offer. In fact a required addendums says you waive any rights to ask to have anything fixed and any further inspections.
And they don't guarantee utilities will be working.
And it requires that the EMD be forfeit by the buyer as soon as the seller accepts the offer.
So you got to inspect before offering and give up the emd at the start of the contract.
I wonder if this is a trend that will slow the REO market a bit.
I convinced my FHA client to walk even though she wanted the house. I don't know how you deal with an FHA when you can't inspect. I suppose you could do all the FHA stuff before the offer...but that does not sound workable.
New thing on the REO front. Just got a contract that requires all inspections to be done prior to making an offer. In fact a required addendums says you waive any rights to ask to have anything fixed and any further inspections.
And they don't guarantee utilities will be working.
Having an inspection done before you even make an offer complicates matters - tough to evaluate any purchase
Re fixing anything, in our area, REOs are always sold "as is".
I just closed one that had that stipulation on it. Fortunately for us, the utilities were on... the listing agent had turned everything on and was being reimbursed all expenses afterwards by the bank. What we did was make the offer, the bank accepted, sent over the addendum. Before signing the addendum we went and did the inspection, then signed the addendum, sent in the escrow and.... closed.
I can't see too many buyers giving up their earnest money, or else it will be a very small EMD. There is still the title report, HOA reports, CC&R's etc. I mean changes can happen between when a deal is signed and closing.
That does not bode well for trying to get homes sold.
If I remember correctly the addendum had to do with inspections. The bank still had to give clear title and if they couldn't the escrow was not at risk. Well, for the one I did anyway...I'm sure they aren't all the same.
If I remember correctly the addendum had to do with inspections. The bank still had to give clear title and if they couldn't the escrow was not at risk. Well, for the one I did anyway...I'm sure they aren't all the same.
Actually the way this one reads it makes no difference whether it closes or not or why. And you have to provide the addendum with your offer. Clearly you have an action against the lender/owner if it does not close but there is no obvious way to get the EMD back except an action.
I know a couple of investors who could run their own inspection and make such a deal but I can't see trying it with an FHA.
I have seen multi-family listings for years like that. FWIW.
I guess too many deals have terminated when buyers figure out that foreclosures are often in dismal condition, and the banks want assurances of closing.
A lot of our foreclosures here stipulate "No FHA or USDA."
And the real effect of such stupidity by the banks will be an immediate $15,000-$20,000 drop in value for REO properties.
It limits the market to folks with cash to risk, and strong stomachs.
I would think a home like this would not be for your average buyer and someone would need to be an experienced investor / buyer when they look at the home.
For the average buyer I would use the real estate 4 letter word - "Next"
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