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We currently have an offer on a short sale, which the seller approved, but of course we are still waiting on the bank. Since the house is not in great condition, we opted to pay for an inspection before receiving bank approval on the price.
The inspection uncovered some substantial issues and the seller is willing to submit an addendum lowering the price. However, the agent says that if we accept the new price, we have to remove the inspection contingency. Is this the protocol? It sounds a bit suspicious to us.
We are concerned with removing the contingency because there are some issues with the crawl space and we would like to hire a structural engineer/mold remediation specialist to check things out and make sure it's all fixable at a reasonable cost. We'd rather not spend more money on inspections before the bank approval.
That's not the usual protocol. I believe there is a 14 or 17 day inspection contingency and that time frame does not start until the bank has approved the short sale. However, I'm sure the agent wants quick bank approval and closing so they want you to remove that contingency. That's not in your best interest considering you want more inspections done after the approval.
My real estate agent suggested that I offer to lower the number of days for the contingency so that the offer is more appealing. We lowered it to 10 days. So maybe that's an option you can take. However, for your protection and so you don't have to shell out more money before the bank's approval, you should still keep the inspection contingency in the contract.
NEVER remove the inspection contingency upon acceptance, even if the listing agent asks you to do so. This will require you to purchase the property regardless of it's condition and what you uncover. Only other way out would be if your lender denied your loan or if the appraisal came in low.
However, the agent says that if we accept the new price, we have to remove the inspection contingency. Is this the protocol? It sounds a bit suspicious to us.
The agent is only interested in getting paid. No, it's not protocol. Scumbag agent.
Sounds like there has already been an inspection, if fact one that "uncovered some issues" and the seller has lowered the price. In such situations it ABSOLUTELY is not OK to get more inspections from more professionals -- at some point buyer has to COMMIT!
If an engineer is hired and says repairs are needed will "buyer" want to wait to get multiple contractors to submit bids for repairs? That could take weeks...
(Folks that assume negotiations ought to never ending or that agents are not being honest either did not read the same original post or are letting their biases show...)
The real question here is the contract language. Typically when you make an offer on a home you are allowed an inspection contingency. All inspections must be done during that period. Once you provide the seller the result of the inspections and negotiate a resolution (in this case the seller has offered to lower the price), your inspection contingency has been satisfied. The rule "one bite of the apple is all you get" applies.
Since we do not have your contract language available it is impossible to determine if you are still entitled to aditional inspection or another inspection period.
Because it is a short sale, the offer price is not firm until the sellers creditors approve the price, which may be your offer price or other amount. Lowering the price at this point will not get you anything because the bank is going to counter with the price they want anyway.
I would wait until the seller and bank come to an agreement and you get the agreement notice, then you can decide if the home is worth the price.
Thanks for the responses, much appreciated. The contract states that it is contingent until 10 days after approval for inspections UNLESS the buyer delivers a copy of the inspection report with a Home Inspection Notice listing items the Buyer requires the Seller to repair and/or stipulating a dollar credit.
In the addendum the agent wants me to sign to lower the price, I would agree "to remove the Inspection Contingency and provide a copy of the Inspection report in exchange for (the seller's agreement to decrease the price)."
So from what I can read, it seems legitimate to remove the contingency given that I have conducted the inspection and the seller is willing to decrease the price. I guess the question is whether there is an option to decrease the price AND keep the contingency.
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