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They accepted offered price, but want some additions to the contract:
1. Initial period allowing us to do the inspection was 10 days, they want to change it to 3.
2. buyer agrees that failure to provide required commitment documents to seller within this time frame will result in seller retaining EMD; buyer agrees to increase sales price to cover any lender required repairs if any.
3. Subject to seller addendum, sold as is $100 per diem if extended at no fault of seller; all offers are subject to final investor approval;
Can please someone explain what points 2 and 3 means? Is it normal for buyer to sign with these points?
Am I correct that the point 1 is extremely alerting?
I don't see any other reasons for that, unless something is really wrong with the house.
I would be much more concerned with #3 than number #1. It's not hard to get an inspector in there within 3 days if you have an agent with good contacts. RE #3... How solid is your lender, the condition of the house, and your expectation you can close on time?
It's a bank... they're probably not at all familiar with the condition of the house.... they've never been inside it. So they're probably not actually *hiding* anything, they just don't want to tie the house up with a nervous buyer who is worried about the details or wants to nickel and dime them with maintenance repairs. They want an investor who wants it as is and isn't worried bout whether the tub drain leaks or there's moss on the roof.
Number 1 is definitely a tight window, I'd be hard to get an inspector within 3 days (that's worth their weight). You also need time to receive the report and review it to decide your next plan of action. I'd try my best to get that to atleast 7 days. Are utilities on, or do you need to put them on in your name, which could take a day or two..
Number 2 is probably related to any release of financing/appraisal contingencies. In my neck of the woods, we have documents that unless signed by the buyer and furnished to the seller (whenever necessary in the process) the contingencies are still in force and the buyer can vacate the contract without being in default. in your case, they want to be able to keep your earnest deposit.
Basically, stick to whatever contingency windows established upfront, so be on the ball with your lender etc.
If your appraisal comes back with any lender required repairs, they want you to pay for them essentially by way of increasing price.
Number 3, if you dont close on time and need extension, they will charge you $100 per day. Common for bank owned properties.
#3 can get you if the timeline is short, appraiser comes, lots of things get flagged... big or little, and repairs need to be made, and then the appraiser has to be scheduled to come BACK out and re-inspect it.
I have have the listing agent for the bank tell me "Oh we never really charge the $100/day fee... unless the buyer is intentionally delaying the sale. We always forgive it if it's legitimate delays". Did NOT feel reassured by that.
They accepted offered price, but want some additions to the contract:
1. Initial period allowing us to do the inspection was 10 days, they want to change it to 3.
2. buyer agrees that failure to provide required commitment documents to seller within this time frame will result in seller retaining EMD; buyer agrees to increase sales price to cover any lender required repairs if any.
3. Subject to seller addendum, sold as is $100 per diem if extended at no fault of seller; all offers are subject to final investor approval;
Can please someone explain what points 2 and 3 means? Is it normal for buyer to sign with these points?
Am I correct that the point 1 is extremely alerting?
I don't see any other reasons for that, unless something is really wrong with the house.
I've seen this over and over again when buying from a bank. Their addendums are written to favor them in this way and I've never seen it otherwise.
Point two is just what it says as far as having your loan commitment documents provided to them buy whatever date it says in the contract. If you agree to their terms and don't do it they can keep your earnest money and cancel. And you will be responsible for paying for any lender required repairs in order to get your loan. What kind of condition is this house in? If things are called out you will have to pay for them, likely put money in escrow for the purpose of fixing things after closing if it is a costly item. I think you need to be asking your own agent instead of us.
I have never known a bank to ever sell anything other than as is and they do not do repairs at all, so I would say this isn't unusual at all.
Point 3 is telling you that if you don't close on time you will owe the bank and additional 100 bucks per day until you either do close or cancel because you can't get your loan.
If these things bother you too much it may be that buying a bank owned property isn't for you. There is more risk involved, but sometimes the price of the house makes it worth it. You just have to weigh it out and decide.
since you are not under contract, but you say have agreed on your offer otherwise...
you can schedule an inspection today, especially since the 3 day clock isn't ticking yet.
you can submit all your docs to your lender, so they take the least amount of time possible
you can schedule a qualified contractor to come either at the inspection or still before your loan date, so you know the cost of repairs that you're agreeing to bear.
1. Initial period allowing us to do the inspection was 10 days, they want to change it to 3.
2. buyer agrees that failure to provide required commitment documents to seller within this time frame will result in seller retaining EMD; buyer agrees to increase sales price to cover any lender required repairs if any.
3. Subject to seller addendum, sold as is $100 per diem if extended at no fault of seller; all offers are subject to final investor approval;
i'm not in real estate ...but
1. Unreasonable. 3 days is tight. A good inspector may not be available. I had one that I used for a house that fell thru and I wanted to use him again and I had to wait because he was not available that week.
2. They will keep your earnest money deposit if they feel like it whatever they decide their parameters are.
2. Your sale price is not set. If the inspection is bad it looks like you may not just be able to walk away without at lease losing the EMD. You will have to pay above and beyond the price of the house to get repairs done "if any" to make it financeable I guess, meaning if they find termite damage you pay $50K to tear it up and replace the rotten wood.
3. They can add whatever they want. -----Subject to seller addendum and keep your EMD
$!00 a day if closing is extended for any reason as long as it's not the seller's fault.
The investor? has to approve everything.
I would say unless the home is a steal or in great shape that you should walk. But some of this may be standard with bank sales, just make sure you know what you are getting into, talk to your real estate agent, and the bank lending you the money too.
What would seem odd to me is that they want to add these things after the offer, unless that's their standard way. Seems fishy.
They accepted offered price, but want some additions to the contract:
1. Initial period allowing us to do the inspection was 10 days, they want to change it to 3.
2. buyer agrees that failure to provide required commitment documents to seller within this time frame will result in seller retaining EMD; buyer agrees to increase sales price to cover any lender required repairs if any.
3. Subject to seller addendum, sold as is $100 per diem if extended at no fault of seller; all offers are subject to final investor approval;
Can please someone explain what points 2 and 3 means? Is it normal for buyer to sign with these points?
Am I correct that the point 1 is extremely alerting?
I don't see any other reasons for that, unless something is really wrong with the house.
I think that is the key to keep in mind. The bank just wants to get this house off their hands as soon as possible and they simply aren't going to haggle over repairs like you might with a private seller. As others have said, if that isn't acceptable to you, you probably should walk away and look for a different house not owned by a bank.
I've never seen a bank give more than 7 calendar days for a home inspection period BUT the inspection period doesn't start until the bank rep signs the offer so I always booked the inspection as soon as I had a verbal so that I could get a good inspector. It generally takes 2-3 days to get the bank addendum signed so that bought me a few more days.
The other two clauses are totally normal.
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