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In California the laws are set up to protect the consumer in my opinion.
Here is a compelling link Final RPA & April 28th Forms Release specifically the RPA and Related Forms Drafts. Certainly looks like at least in the case of an fha loan, we have a new request page!
OK : what is IS? "as is" is practically and conceptually meaningless unless someone wants to let you know what is means.
A physical inspection will give you a limited, visual idea of what is means for that individual property. NOW , fortified with that information, you can collaborate with your agent and draft a request for allowance or repair based on what your intentions and resources are and what is reasonable( health, safety, difficulty, expense).
In California, you can't have a transaction canceled on you just because you submitted a request letter. It may be the same where you are.
I hear of agents renegotiating successfully ALL OF THE TIME!
Wayne Gretzky said " you miss 100% of the shots you never take" ...great advice!
EDIT: Please have your agent explain what your options are as per your contract...I obviously used the word "California" a few times..
Those buyers who have had the best luck in getting the bank to take the condition into consideration had some sort of inspection done before they made an offer.
Pre offer home inspections are like religion to some folk. Some folk believe it is necessary to agree on a contract price first and then attempt to negotiate inspection issues. When the seller is a bank, that approach rarely bears fruit.
There is nothing that requires the seller to play ball and when the seller is a bank, it rarely works. The buyer is free to walk away from the deal. When he does so, he is out of pocket the cost of the home inspection no different than if he had inspected the place before making an offer only to learn that the deal could not come together.
Yes, he/she is different! They make be out the inspection fee ,but they don';t have to spend $$$$$$$$$$$ to to the major repairs and the bank now knows just how many warts their baby has...like I wrote; LOTS of success stories in my area,,,to be honest though...so much replies on CARING representation! Its way better to walk away from a house with lots and lots of repairs to be made than to help the banks out in a declining and troubled market. If they realized that the buyers are helping them out even when asking for allowances and/or repairs, maybe this thread never would have been started...hmmm
If the buyer walks away from the deal, is the bank required to present the inspection report to the next potential buyers, assuming they acquire the report from the buyer?
I know at least one downside to pre-offer inspection. It is that the buyer doesn't even know if the buyer's offer will be accepted. What happens if the buyer spends money on the inspection already but the bank accepts another offer instead?
If the offer is contingent on inspection and the inspection turns up something that would cause you to not get financing the bank will likely bite the bullet and repair. Case in point - I was under contract to buy an REO in Indiana. Inspection found that the house had not been winterized prior to cold weather and every pipe in the house, every radiator, and the boiler were cracked. I did not have the time to wait for repairs, so I walked. Bank pulled the listing, got a contractor in to replace the plumbing and the heating system, and re-listed.
I would imagine that the bank would in fact make repairs that would be needed to make the house habitable.
If the buyer walks away from the deal, is the bank required to present the inspection report to the next potential buyers, assuming they acquire the report from the buyer?
Disclosure laws do not apply to REO in my state.
I know at least one downside to pre-offer inspection. It is that the buyer doesn't even know if the buyer's offer will be accepted. What happens if the buyer spends money on the inspection already but the bank accepts another offer instead?
Flip it around....assume the offer was accepted and the bank will not play ball with the inspection issues. Buyer is still out of pocket the cost of the inspection.
An offer that waives the home inspection contingency ( because either the buyers are capable of inspecting it themselves or had a pre offer home inspection) are making a stonger offer than someone who offers with a home inspection contingency. Professional investors do not play games when they want the best deal possible. Removing the seller's risk that unknown inspection issues will ***** the deal increases the likelihood of closing. Such offers may also sometimes trump an offer of more money because the terms are more appealing.
Your offer is not about you, the buyer. You have to get into the seller's head and figure out how to make it work.
I've done a good amount of loans for purchasers buying foreclosures. If the seller accepts a contract with new financing, there are certain responsibilities in accepting a contract that is not for cash. If the home inspection turns up something that is a safety issue or a code violation, they are making repairs without flinching in my area. If it's the dishwasher isn't running or the spicket out back is broken off (and the water is off), probably not. I had one inspection turn up a wiring job that was a death-trap waiting to happen. There is no way a bank can ignore that in a re-sale with financing. I don't care how many "as is" addendums were signed, there's potential liability of huge proportions. This home was repaired immediately (as it would probably void the hazard policy if the seller (bank) knew about it).
I have also seen appraisal repair requirements met without blinking an eye. This has included mold remediation, repairing a red tag from the gas company (leak at stove), to a chimney inspection and repair. Don't assume all negotiating power is down the drain just because there is an as-is clause.....
But, never, ever let your appraisal replace your home inspection.......the appraiser will note certain things they notice that are wrong (or sometimes, even great) about the property.......but as a general rule, they are not looking for trouble. However, if it's staring them in the face, they are required to note it in the appraisal. Your home inspector will tear the place apart looking for problems. You have to decide if you can live with them.
Thank you SO much to everyone who has posted. This has been more than helpful to read all your thoughts on this. We're going to decide by tonight and make an appropriate offer. Went to the house yesterday and did notice a few things that we're betting the bank won't be willing to fix. So we'll be factoring in that with what we're willing to risk. Talked to our agent last night too, which had mostly the same thoughts as shared here - unless its a very blatant or risky problem thats discovered, they aren't too lenient on adjusting the price.
Was the electric and water on at the property. If it is, you can do a basic inspection yourself and check some of the following (but don't think this should take the place of a professional inspection).
Check if ac works
Check if heat works
Turn on faucets and check under sinks for leaks
Find the hot water heater and see if it's leaking
Look up.... and see if there are any brown or wet spots on any of the ceilings
Look down.... and see if there are any brown spots on the floor molding
Open and close all windows
Turn on all appliances
Run the dishwasher and washing machine through a cycle to see for leaks
Look around outside of house for any decay in the wall material
Flush all toilets
Look at your roof for any missing shingles
Check if garage door opener works
Turn on all lights
Turn on lawn sprinkler if there is one
Look for mold near windows, doors, near any plumbing, etc
This is just a basic list, but might help you uncover some problems that you'd factor into your price.
Good luck.
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