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Most short sales have been on the market for a while and many times there is no electricity in the house.
Impossible to check HVAC since there is no contract with the utility, might as well use the inspection money to fix up the property.
Another reason why an inspection on a AS IS property would be a waste a money for a knowledgeable buyer (experienced with home repairs).
Good for you but you don't seem to understand the issue being discussed. Furthermore purchasing a house that has been foreclosed vs one that is in a short sale are absolutely and completely different.
Ok pal, whatever you say! You are the expert on pretty much every topic on these boards, how dare I opine?!
I understand that foreclosures and short sales are different situations, as are REO and ORE properties.
With the glut of builders going bankrupt, there are plenty of homes (subdivisions, condo buildings etc) that are becoming bank owned. Once the bank assumes ownership, they will try to market the properties, but they get minimal upkeep. If the homes are new construction, then no need for an inspection for the most part.
My point was that I would pay for an inspection because I would want to make an educated decision about the condition of a large puchase. An inspection of a foreclosure or short sale may not be as in depth as a normal inspection, but I would still want to garner as much feedback on the property as possible.
Like buying a regular resale, you should at the very least be able to get out of it by giving up your earnest money deposit...losing $500 or so because the inspection revealed something major is a lot better than getting stuck with a mortgage on a crappy house.
But yes, hopefully the RE agents can clarify.
The earnest money is to prove you are serious, it's not a limit of your potential damages if you walk away. If you walk out on an accepted contract you are liable for a whole lot more than just earnest money. You are also liable for damages your actions caused to the seller and their real estate agents should they choose to pursue it. You really do not want to enter into a real estate contract with this sort of contingency plan.
IMO, you should consider the purchase of a short sale like that of an AS IS property at auction. You make your offer and hope it takes and be prepared for surprises. It's extremely risky. In return for the risk you are gaining a home for substantially less money than it would cost otherwise. If this sort of sale & risk doesn't sound appealing then look at purchasing homes by conventional means.
Whilst a little off topic, my main concerns with buying short sale properties are the time it takes to get any sort of answer and the way the "bidding" is conducted. What seems to happen is that if I put in an offer for a property then the bank looks at it and decides if they like the offer. They tell me nothing. I just wait. However I am now comitted and cannot use that money to buy another property just in case my offer is the lucky one.
Meanwhile the bank is collecting other offers and of course, both the bank and the owner want the highest amount possible. This can go on for months and I am still waiting. Now, I do not use mortgages, this is MY money and I like it to earn me money. My money is now tied up but not earning.
I can probably gain access to the property and take a friendly inspector with me. However this is very unofficial but, it gets me answers.
The bank/owner response is now (for me) a random event. On top of this they may not even tell me that my bid failed.
Whilst a little off topic, my main concerns with buying short sale properties are the time it takes to get any sort of answer and the way the "bidding" is conducted. What seems to happen is that if I put in an offer for a property then the bank looks at it and decides if they like the offer. They tell me nothing. I just wait. However I am now comitted and cannot use that money to buy another property just in case my offer is the lucky one.
Meanwhile the bank is collecting other offers and of course, both the bank and the owner want the highest amount possible. This can go on for months and I am still waiting. Now, I do not use mortgages, this is MY money and I like it to earn me money. My money is now tied up but not earning.
I can probably gain access to the property and take a friendly inspector with me. However this is very unofficial but, it gets me answers.
The bank/owner response is now (for me) a random event. On top of this they may not even tell me that my bid failed.
Nah.
The NCAR Short Sale Addendum allows a buyer to Unilaterally Terminate the contract before written bank approval. This protects a buyer from the unknown waiting period. If the offer/contract was structured properly by an experienced agent with short sale knowledge you will be out $0.
Basically, as a buyer you can walk with no penalty during the time your waiting and waiting for that bank response.
The NCAR Short Sale Addendum allows a buyer to Unilaterally Terminate the contract before written bank approval. This protects a buyer from the unknown waiting period. If the offer/contract was structured properly by an experienced agent with short sale knowledge you will be out $0.
Basically, as a buyer you can walk with no penalty during the time your waiting and waiting for that bank response.
That is really interesting. I don't live in the US - yet, next year - and I have shied away from Short Sales because of what I said in my earlier post. Even with NCAR (which I need to read about), I am still leary of these types of sales. Basically I want a starightforward deal where I can simply negociate with a vendor.
My realtor is really good a finding the types of properties I like.
I would always have an inspection done before the final deal is done.
.... Basically I want a starightforward deal where I can simply negociate with a vendor. .
Then you want to stay away from short sales.
Many people confuse them with foreclosures, as already demonstrated above, but buying a foreclosure is a fairly straightforward process in comparison. In that situation you are simply buying the property from the bank. You definitely want to put an inspection clause in such a purchase offer.
Many people confuse them with foreclosures, as already demonstrated above, but buying a foreclosure is a fairly straightforward process in comparison. In that situation you are simply buying the property from the bank. You definitely want to put an inspection clause in such a purchase offer.
That was precisely my opening post in response to the OP. I am far too wily to get stuck in a long drawn out, one sided deal like a short sale and, I said so.
Thank you for reinforcing my decision. Always nice to hear.
However I stand by my original reply to the OP that I feel that an inspection by a qualified expert is a worthwhile expense. Especially in the case of a short sale.
Even Foreclosures are not that straightforward in today's market. These seem to be moving toward the fashion of Short Sales wherby the bank collects bids, ignores the bids it does not like and juts sits there, waiting for an offer it does like.
I mentioned a while back that in 2009 I was offered what amounted to a buy two, get one free deal from a bank because I was a cash customer. Those days are long gone.
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