Are all foreclosures AS-IS - take it or leave it? (how much, heater)

[Fountainrunner]

I'm in the process of purchasing my first home - a foreclosure. Today we went to the house to perform an inspection which the listing agent said was unreasonable. The listing agent has done everything in his power to make it known that the house is AS-IS though it was not listed AS-IS when we first viewed it. Anyway, he promised to have the water and gas on for us to do the inspection. However, when we showed up today nothing was on. No water, no gas, and half the electricity in the basement wasn't working. When my agent and the inspector complained the listing agent threw a fit and went off telling us we don't know what we're doing because all foreclosures are AS-IS - take it or leave it. My inspector said he was crazy and my agent fought with him to no avail. The listing agent then said he'd break the meter to turn the utilities on to which the inspector said it was against the law and the listing agent stormed out and drove off. I've never seen an adult act so unprofessional.

The inspector was kind enough to take a look around and do an informal inspection since we were there. His findings included: gas heat venting disconnected (safety issue), numerous ceiling leaks throughout, faulty wire hookups, exposed wires (safety issue), fuse boxes in disrepair, additional fuse boxes hidden behind plaster, poor bathroom construction, illegal kitchen in basement, old water heater, evidence of mold in bathrooms and a sloping backyard with a 5 ft deep drop straight down midway it (safety issue!!!). The house is listed as a two family but the illegal kitchen placement and horrible addition of the bathrooms say this home was never authorized to be a 2-family home. And clearly none of the construction was done with proper permits.

The inspector did say he's seen foreclosed homes in far worst condition lately here in New Jersey. My question is would it be unreasonable for me to ask the bank to fix these issues if the listing agent keeps saying AS-IS? The inspector says he wouldn't pay what I've offered for the house when New Jersey is currently overrun with foreclosures. He's telling me the bank should be willing to work with me if they really wanted to get rid of the house. My agent thinks I should adjust my offer considering what we now know because the home has so many issues.

Please I need advice. I'm now officially confused. I like the house (don't love it), like the location, love the views (I can see the Statue of Liberty and NYC skyline from all my back windows). I'm just concerned I'm in over my head here and dealing with this listing agent representing the bank is the absolute worst part.

[jaynarie]

In the case with my foreclosure, they would not make repairs, but I could back out after the inspection and I'd lose $1000.

[d4g4m]

All foreclosures are as-is. That's because there is no disclosure form from the person being forclosed. With the listing there should have been a long warning disclosure. The bank knows nothing about the property. That's why it is being sold 'as-is' and will do nothing. The bank is not in the repair business. It is up to the potential buyer to inspect. Unless you have deep pockets to fix all the problems and bring the house up to code, I would re-think purchasing. You should also check the county records to find out if it is a one or two family. If the records say one family, the county inspector will red tag until all problems are fixed.

[Ultrarunner]

My experience is basically As Is.

My brother sold one where the Bank Agreed to a small credit for damage that was done the day before the scheduled closing.

Basically, you need to make sure your comfortable that the offer you are making is conservative enough to take on all the homes problems.

The home is just a line item on the Bank's list of Real Estate Owned... In all probability the Bank could be a 1000 miles away without a clue to the properties actual condition.

In a true Foreclosure all you are buying is the lender's interest in the property. These types of sales are generally done auction style on the steps of the county court house for cash.

Most "Foreclosure" sales people think of today are actually property that has already been foreclosed on by the lender and the lender is now selling to make the best of a bad situation.

[teatime]

Yeah, foreclosures are "as is" but you are CERTAINLY within your rights to have a full inspection done and base your offer on the outcome! That's what I did -- put down earnest money and made an offer stating specifically that the offer was pending inspection and I could take back my check if the inspection was unsatisfactory.

Thankfully, all was well. But upon my second visit, there were workers there replacing the skirting and fixing the gate on the picket fence. I was surprised -- and pleased -- as it wasn't anything I requested! This was a Fannie Mae property. I don't know if their foreclosures are handled differently than banks.

[rdlr]

In my neck of the woods, they are usually sold in 'as is' condition. Many times, the bank will offer incentives to unload the property. That can add up to be thousands of dollars, used for closing costs or repairs to be made by the buyer.

Here, we have foreclosures, bankruptcies, tax sales, and short sales. All different, but kind of the same.

[jimboburnsy]

I think your inspector has given you good advice. You may want to look for another foreclosed property.

The listing agent sounds really crazy. Regardless of whether or not the home is sold AS-IS, you still need to be able to satisfy yourself about what work needs to be done before the home is livable by way of a formal inspection. The bank is never going to contract work on the house. Banks deal in money, mouse-clicks, zeroes & ones, not hammers, wires and sheetrock. If you can ascertain how much the repair/remodel would cost you can probably negotiate the price down but the bank will laugh in your face if you ask to have work done. If you can't get a fair price, walk. Don't get strong armed into a money-pit.

[Cosmic]

Originally Posted by jimboburnsy

I think your inspector has given you good advice. You may want to look for another foreclosed property.

The listing agent sounds really crazy. Regardless of whether or not the home is sold AS-IS, you still need to be able to satisfy yourself about what work needs to be done before the home is livable by way of a formal inspection. The bank is never going to contract work on the house. Banks deal in money, mouse-clicks, zeroes & ones, not hammers, wires and sheetrock. If you can ascertain how much the repair/remodel would cost you can probably negotiate the price down but the bank will laugh in your face if you ask to have work done. If you can't get a fair price, walk. Don't get strong armed into a money-pit.

I know zero about foreclosures, I prefer to keep it that way. But if any property is in poor condition and being sold "AS IS" you must make your offer fit the situation. Any repairs must be included in the price deducts. Forget anybody doing repairs, just withhold enough money to ensure you can bring it into the proper condition. If the price isn't that range, get out of there quick.

I would say the offering price has to be one of those offers you can't refuse deals. Lots and lots of slack in there for all the unseen conditions. Paying even close to a fair price, seems a bit loony to me. This puppy screams risk.

Maybe this is the flip side of all that real estate mess. Do not assume foreclosure means a great deal. Recently I went to look at a small farm. First day on the market. My first impression on seeing it was you got to be kidding. They wanted $50K. So I ask this realtor dude (who would not know the truth if he stumbled over it, I know him pretty well) why do you think it is worth this much. His answer, "The bank needs this much out of it". Lord, it would be a rip off at half the price. Again, risk, risk, risk, the place was a mess, zero answers on anything. Where is the septic, where is the water, where is this, where is that. Once I really got a good look, not sure I would have taken it for free.

But the World has a sucker for everything. Within ten minutes of my being there another dude showed up and was panting big time. P.T. Barum was right there is one born every minute. That dude actually gave them the price. Lots of luck with that one, most expensive farm this side of the moon. Not everything is a deal, you must be able to see thru the thorns and what it might become, including some sort of game plan based around what it might cost to make it that castle on the hill.

That idea of paying brokers in AS IS conditions is insult to injury in my book. What service are they pretending to be rendering.

This real estate mess probably is not over. The next chapter might be all the suckers who overpay to allow banks to get some of their greed back, that and more ill earned money for brokers. H,mmmm the idea of earning could be a subject of great debate, what do they do that justifies those numbers anyway????

If I had any doubts about the value I was purchasing I would be running, not walking. This whole idea of you are purchasing the lenders interest and all of those ramifications would leave me cold. Sounds more like lawyer Heaven to me. I would be looking for the deal of a lifetime, with the offer I never can refuse. If the money ain't so sweet that I can't pass, I would never consider it. Remember risk is where you find it. Learn to recognize it in all its ugly forms.

[rdlr]

We have property foreclosure sales on the court house steps, once/month and these properties are advertised 8-10 at a time. Many people gather, they post a designated amount in order to bid, and there is a minimum opening bid. Buyers are welcome to inspect the properties, and usually, they are investors who can estimate how much it will take to bring the property back up to average condition. They do the work themselves, quickly, and either rent it, or re-sell it.

[Fountainrunner]

Originally Posted by d4g4m

All foreclosures are as-is. That's because there is no disclosure form from the person being forclosed. With the listing there should have been a long warning disclosure. The bank knows nothing about the property. That's why it is being sold 'as-is' and will do nothing. The bank is not in the repair business. It is up to the potential buyer to inspect. Unless you have deep pockets to fix all the problems and bring the house up to code, I would re-think purchasing. You should also check the county records to find out if it is a one or two family. If the records say one family, the county inspector will red tag until all problems are fixed.

Yes, I think it's now pretty clear this is not a 2-Family house. The fact that the previous owner attempted to convert this into a 2-family and did a really poor job is one of the reasons the home is in sure disrepair. I'll contact the county inspector and see about getting the records on the home.