Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Is it recommended to get a home inspection done with a short sale house? It's probably a stupid question, but since a short sale is more or less 50/50, that $500 for a home inspection might be wasted. Any thoughts?
Is it recommended to get a home inspection done with a short sale house? It's probably a stupid question, but since a short sale is more or less 50/50, that $500 for a home inspection might be wasted. Any thoughts?
But if the inspection turns up something that needs fixing then the money is not wasted.
I have inspections on ANY property I buy. I just add the cost of the inpection and any renovation work into the total purchase price and that will show up in my ROI% when I rent it.
For me, an inspection is just part of the cost of doing business. It's a no brainer. Likewise I never go near short sales. Life really is too short for those kinds of sales..
Is it recommended to get a home inspection done with a short sale house? It's probably a stupid question, but since a short sale is more or less 50/50, that $500 for a home inspection might be wasted. Any thoughts?
IMO, you should consider a short sale as an "AS IS" situation. If the inspector finds something you most likely won't be able to get any more money from the bank and seller.
I got an inspection when I bought my short sale house. Gotta do whatcha gotta do, but if he found something it was my way out of my offer. If I was looking for another house and wasn't on an urgent 'schedule', I'd def try short sale again. Good luck.
Well you don't typically get an inspection until you are under contract, so even with a short sale I think it'd be more than "50/50." As has been said, an inspection is recommended on any house, so IMO it's even more important on a short sale (personally of the houses I saw it seemed like often times the short sales were in worse conditions than foreclosures). But no, you should not expect the inspection to result in a lower price.
My experience is not very good with short-sales...to say the least...
Although some listing have apparently a good listed price, most houses are in bad shape and condition on home inspection is not an option. Reason is multiple bidders that offer cash and no conditions (some don't even get to see the property). Plus for short-sales, you have to accept it at "as-is" condition.
I have also seen unprofessional sale realtors of short-sales who must have pre-aranged deals - since they are awful in getting back to acknowledge an offer being received, and when they do, it is to say that another offer was already accepted (although the short-sale was listed minutes before he received the offer). And in some cases sale representing realtor's voice mail box is always full, with no email responses... In other cases, I had the "pleasure" after many weeks of "offer acceptance" to have the bank coming back asking for another 25% more than original list price (same as owner accepted offer).
Short-sales are like a lottery and only worth pursuing if one does not have an emotional commitment to it.
If one really wants a short-sale, it might be worth having the inspection for peace of mind and help on making up their mind. But be forewarned, there is a small chance a bider will get a short-sale (at the listed price anyway).
IMO inspection is a waste a time since a good hands-on repair/experienced home owner is more knowledgeable than many inspectors...of course experience level varies...
Your offer or contract should be written so that your due diligence period does not begin until after the bank has provided written approval for the short sale. This way your inspection, appraisal, etc.. money spent will not be wasted upfront if they don't approve the offer.
As a buyer you don't want to start the inspection process until you know for sure that the short sale is going to be approved. The same goes for the appraisal and any other inspections or money you might spend during your due diligence period.
In addition, when I handle short sales for buyer clients of mine I always make the buyer's deposit due 2 business days after the bank's written approval has been received. This way my client's money is not tied up for an open ended period of time.
Agree 100% with Charlottean. I write all short sale offers with due diligence period beginning after written approval received from ALL lienholders (this should protect you if there is more than one lien on the home). No due diligence fee and no earnest money until after written approval received as well. Often with short sales you will need to move very quickly on that once written approval is received, but it's better than shelling out a lot of money if the bank isn't going to approve the sale anyway.
In answer to your question on inspection, it is an absolute "yes". You should have some time (usually a short period) after bank approval to conduct your inspections, but you need to be sure that what you are getting is worth it in terms of repairs that you would need to make. The last thing you want is to have thousands of dollars of repairs that you may have walked from had you known about them.
^My question for you two real estate agents is how often do banks accept short sale offers with a due diligence opt out clause? If this isn't common then it seems to me that an inspection is a waste of good money in in the scenario that you mention.
^My question for you two real estate agents is how often do banks accept short sale offers with a due diligence opt out clause? If this isn't common then it seems to me that an inspection is a waste of good money in in the scenario that you mention.
Yet another reason to stay well clear of short sales.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
