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We're worried that our 'best and highest' offer on an REO will not include any room to barter the price back down if we find anything wrong upon inspection.
My question right now is, are banks willing to adjust the price, ever? Or are they more likely to not bother, say take a hike, next person in line.
We're trying to decide what amount to make our best offer at - we'd go higher if we were confident that they are even slightly flexible with inspection findings (well, septic, electrical, etc). If they are not, then we will need to make a lower offer. What is everyone's thoughts and experience with this? The listing does not say anything like 'as is' etc.
Does the listing not saying something to the effect of "sale is as is-where is"? Most REOs are selling the house "as is" in it's current condition. What you see is what you get. Typically, the only repairs they'll make are things that come up after you're already under contract, like a house my buyers were buying, all of a sudden the water heater exploded, so they fixed it. If it had exploded prior to writing and agreeing to the contract, no they would not have fixed it.
I wouldn't write up and sign a contract saying I'm buying it "as-is" and then hope to come back and renogiate after they accept it. If you're concerned about issues, see if they'll accept a contract contingent on an inspection. If they won't, then either try and do an inspection beforehand (which is an added cost to you if your offer isn't accepted) or factor into your asking price the "potential risk" of something wrong with the property.
The contract is contingent upon inspections. And the listing does NOT state anything to the effect of as is or where is.
My main question here is whether banks are usually willing to negotiate or give you credit towards fixing something (if we find some major repairs needed for the well or septic) once you are under contract and doing inspections.
The contract is contingent upon inspections. And the listing does NOT state anything to the effect of as is or where is.
My main question here is whether banks are usually willing to negotiate or give you credit towards fixing something (if we find some major repairs needed for the well or septic) once you are under contract and doing inspections.
No.
The only time I've ever had a bank agree to fix anything was when the buyer's conventional loan hinged on having the roof replaced before closing.
And even then I was shocked that they did.
(And even though the listing doesn't state as-is, I'm pretty positive that you will sign a bank addendum saying as much if your offer is accepted.)
Most banks do "as-is", so the answer is probably not with these banks. Since you've found one that puts in contingencies, which bank is it and then maybe someone who has dealt with this bank could give you some specifics on if the bank was willing to re-negotiate.
When he listing has the "as-is" warnings and the rest of the boiler plate it is STILL worth getting the LISTING AGENT to communicate to the seller that concerns about possible repair costs could be eliminated and a better deal worked out.
When the seller (who just happens to be a bank...) does NOT specifically exclude the thought they will be sane about repairs by leaving out the as-is warning then it makes sense to expect that repair allowance may be discussed.
If you have NO ability to pay for any repairs I would discourage you from making a bid, as the odds of such a deal working just are too remote, but if the place is a good value AND you has the ability to handle some costs BUT want to rely on an inspection to reveal stuff that is so costly that the seller should be on the hook then I think this can work well...
(And even though the listing doesn't state as-is, I'm pretty positive that you will sign a bank addendum saying as much if your offer is accepted.)
That's how it was with my purchase. The only credit that was offered was for termite inspection/mandatory repairs, and the home warranty ... and it was a fixed amount.
We still countered that addendum, to include the deficiencies from the inspection report, but zero change on the credit. The listing agent was shocked that a buyer would counter with wording that protected the seller ... I just didn't want to lose the deal.
Most likely, after you submit your offer to the bank, the bank will come back with bank addendum that will say that the property is sold as-is. I've made 2 different offers to 2 different banks (not buying both houses, I changed my mind before signing the bank addendum for the first one). Both of them came back with bank addendum that says that the property is as-is. It looks like you haven't made an offer yet since you're still deciding what to offer. Even if you don't have as-is clause in your contract, the bank addendum will most likely have one. The bank did say that the property is strictly as-is but the bank addendum does say that the seller is not obligated to make any repairs or replacements that may be indicated in the inspection reports but the seller may, at its sole discretion, make such repairs. The bank addendum also says if the seller elects not to repair the property, then the buyer may cancel the purchase agreement and get back all earnest money deposit.
When I made my offer, I took into account the repairs needed with the property. However, I'm not a professional home inspector, so there may be some things that I missed. If those problems that I missed are rather big problems, I will ask the bank to fix the problems or, if they are not willing to fix the problems, I will just cancel the contract, as stated in the addendum.
Please note that different banks may have different wordings and/or clauses in their addendum.
I've never had a bank willing to re-negotiate or repair on a REO sale. Not even when I was willing to romance the listing agent at Lookout Point.
(that was for Chuckity's enjoyment)
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