Needed ~ Advice On How To Not Walk Away From Bank Addendums (contingencies, disclosure)

[dreamfollower]

Can anyone out there give any kind of logic or psychological coaxing as to how to instinctively NOT walk away from the obnoxious and scary Addendums that banks hit you with after the initial acceptance of your offer? I have walked away from two ~ from one which said that they have the SOLE DISCRETION to extend closing by 4-months and that they can at their SOLE DISCRETION cancel at any time up to any closing date for any reason. And the other one stated that AT THE SELLERS SOLE DISCRETION they may contest the amount of any taxes, assessments, etc. and that the Buyer unconditionally agrees to assist them in such a contest, legal or otherwise, and that the Buyer partakes in paying a percentage of their legal fees, whatever they may be. {They are not making me pay their part of the pro-rated taxes, but I must be involved in assiting them to recover whatever amount they may question as to their payment of such and to pay some of their legal fees.}

This is a travesty and I am shocked that there is no federal or state oversight to these practices. Thank you.

[MikeJaquish]

Originally Posted by dreamfollower

Can anyone out there give any kind of logic or psychological coaxing as to how to instinctively NOT walk away from the obnoxious and scary Addendums that banks hit you with after the initial acceptance of your offer? I have walked away from two ~ from one which said that they have the SOLE DISCRETION to extend closing by 4-months and that they can at their SOLE DISCRETION cancel at any time up to any closing date for any reason. And the other one stated that AT THE SELLERS SOLE DISCRETION they may contest the amount of any taxes, assessments, etc. and that the Buyer unconditionally agrees to assist them in such a contest, legal or otherwise, and that the Buyer partakes in paying a percentage of their legal fees, whatever they may be. {They are not making me pay their part of the pro-rated taxes, but I must be involved in assiting them to recover whatever amount they may question as to their payment of such and to pay some of their legal fees.}

This is a travesty and I am shocked that there is no federal or state oversight to these practices. Thank you.

I think the smarmiest practice is the withholding of the addenda by the banks until acceptance of a buyer's offer.
You should be able to see the addenda with the listing, as they are material to the transaction.

I don't list REO's, but if I did, this aberration of decency would be difficult to promote.

[azelismia]

what are these even in there for? do the banks ever actually use these addenums? I haven't heard any horror stories involving them being invoked?

[Austin-Willy]

Originally Posted by dreamfollower

Can anyone out there give any kind of logic or psychological coaxing as to how to instinctively NOT walk away from the obnoxious and scary Addendums that banks hit you with after the initial acceptance of your offer? I have walked away from two ~ from one which said that they have the SOLE DISCRETION to extend closing by 4-months and that they can at their SOLE DISCRETION cancel at any time up to any closing date for any reason. And the other one stated that AT THE SELLERS SOLE DISCRETION they may contest the amount of any taxes, assessments, etc. and that the Buyer unconditionally agrees to assist them in such a contest, legal or otherwise, and that the Buyer partakes in paying a percentage of their legal fees, whatever they may be. {They are not making me pay their part of the pro-rated taxes, but I must be involved in assiting them to recover whatever amount they may question as to their payment of such and to pay some of their legal fees.}

This is a travesty and I am shocked that there is no federal or state oversight to these practices. Thank you.

So an owner of property should not have the right to offer the property for sale on the terms they choose? You are free to not accept the terms.

[azelismia]

it's a risk inherent with buying this sort of property and its' why there are good deals on it.. but it doesn't seem right that they do this to you when you do have to sink in your own money for inspections and that sort of thing. It's enough of a gamble on it's own without the risk that the bank would just pull the rug from under you after you've already sank money into appraisals and inspections and tons of man hours of work on making the deal work.

[dreamfollower]

Every home has a seller, no matter bank owned not.

There are 2-issues and one of the posters did bring one up, that being that the Buyer is not privy to the follow-up Addendum prior to making an offer, which basically can void many of the balanced terms {meaning fair} that were part of the initial CA Residential Purchase Agreement. A Buyer makes an offer based on the terms they include in such an Agreement. The Bank may then agree to the price, but sends back a non-negotiable Addendum that does not necessarily change the offered price, but sometimes does not agree to the other financial terms. This is not the bad part. The bad part is that most of the terms of these Addendums put the Buyer in jeopardy by giving Seller SOLE DISCRETION to many things such as unconditional closing date extensions and undisclosed costs. This Addendum also nullifies most of the terms of the original Purchase Agreement. I had one Realtor put me through the motions of the original standard Purchase Agreement, only to then forward on to me the Lender's Purchase Agreement and their additional Addendum. In other words, all the terms and conditions of my offer were voided, and I would be hard pressed to believe that the Agent was not aware of this in presenting me with the original contract as if it were a valued part of the process. {All Bank Addendums differ, so it becomes a farce in having to wait for each Addendum in order to know if you really want to pursue the purchase.} Of course, you may still say "it is their property and may do as they wish" and one does not have to buy it. Well, if that is the case, then what on earth is the purpose of the Statewide and Board of Realtor approved Purchase Agreement that is typically in effect for all sales? These terms were conceived with standards in mind and should remain ethically in place for the protection of fair practices for all. Why does this not apply to a Lender, since they helped to get us in this mess to begin with? The market prices of houses has changed and Lenders should not be able to perform in such an unbalanced way simply because they initially chose to enter into a risky agreement which did not pan out for them. The only thing I give them is the right to claim that they are not responsible for the disclosure of property condition {not including liens} because the Buyer still has the right to inspections for this purpose.

[MikeJaquish]

Originally Posted by dreamfollower

Every home has a seller, no matter bank owned not.

There are 2-issues and one of the posters did bring one up, that being that the Buyer is not privy to the follow-up Addendum prior to making an offer, which basically can void many of the balanced terms {meaning fair} that were part of the initial CA Residential Purchase Agreement. A Buyer makes an offer based on the terms they include in such an Agreement. The Bank may then agree to the price, but sends back a non-negotiable Addendum that does not necessarily change the offered price, but sometimes does not agree to the other financial terms. This is not the bad part. The bad part is that most of the terms of these Addendums put the Buyer in jeopardy by giving Seller SOLE DISCRETION to many things such as unconditional closing date extensions and undisclosed costs. This Addendum also nullifies most of the terms of the original Purchase Agreement. I had one Realtor put me through the motions of the original standard Purchase Agreement, only to then forward on to me the Lender's Purchase Agreement and their additional Addendum. In other words, all the terms and conditions of my offer were voided, and I would be hard pressed to believe that the Agent was not aware of this in presenting me with the original contract as if it were a valued part of the process. {All Bank Addendums differ, so it becomes a farce in having to wait for each Addendum in order to know if you really want to pursue the purchase.} Of course, you may still say "it is their property and may do as they wish" and one does not have to buy it. Well, if that is the case, then what on earth is the purpose of the Statewide and Board of Realtor approved Purchase Agreement that is typically in effect for all sales? These terms were conceived with standards in mind and should remain ethically in place for the protection of fair practices for all. Why does this not apply to a Lender, since they helped to get us in this mess to begin with? The market prices of houses has changed and Lenders should not be able to perform in such an unbalanced way simply because they initially chose to enter into a risky agreement which did not pan out for them. The only thing I give them is the right to claim that they are not responsible for the disclosure of property condition {not including liens} because the Buyer still has the right to inspections for this purpose.

I have no problem with bank addenda.
In North Carolina, the standard Realtor forms are definitely NOT legal standards.
The NC Bar and NC Association of Realtors pointedly disclaim any guarantee of legal validity or adequacy of any provision in the forms.
The forms are a convenience and a protocol standard for Realtors and their clients only. All we gain by the forms is the opportunity to build a transaction in market-recognized common terms, without employing qualified attorneys to draft agreements for every stage of the transaction.
Banks are typically not members of NAR.
Banks typically do not have any ethical guidelines for their behavior in a transaction.
Banks have no fidicuiary duty to an immediate client.
Buyers should have no expectation of an REO manager operating ethically, promptly, or in any other way honoring "the spirit of the transaction." They just don't have that focus or onus.

One common point in an REO sale addendum is that the property will convey by Special Warranty Deed, rather than the General Warranty Deed that is indicated in the NCAR/NC Bar Standard Offer to Purchase and Contract.
An addendum can be easily justified for that point alone.
Bank addenda also define the inspection period and its parameters, and credit contingencies differently from the standard Offer/Contract.
No problem. REO managers are probably handling files from multiple states, and need to have commonality in transaction language to be able to function at all.

My quibble is not with the use of addenda.
My quibble is strictly with the pointless withholding of addenda until the parties have negotiated a deal within the Standard Offer/Contract, and then the bank pops out the addenda.
Our MLS provides a functionality for REO listing agents to upload pdf forms. That should include known required addenda, IMO. At that, buyers may review at leisure and decide to enter into the transaction with knowledge of the stipulations that will be required by the bank.

[2bindenver]

I agree with MikeJ.

In Colorado we fill out Real Estate Commission forms. To fill out anything but the approved forms - we either need to be a party to the transaction or an written by an attorney, presumably licensed in Colorado.

I see more than a few short sale transaction addendums, where they are neither licensed, nor a party to the transaction.

I wonder how they would stand up in court. Anyone with really deep pockets want to try?

[Silverfall]

I have done enough bank transactions and most of them say very similar things. All of my buyers know 90% of what will be on that addenda before looking at bank properties. There are a few differences, in allowed inspection time frames, and the amount you will be charged for delayed closing.

Except for a few local banks, there has always been a big addenda. So if you don't want to sign them, stick with the local banks REO's. They might not require such a scary one.

[DMenscha]

I'd like to see the "seller withdraws without penalty" clause challenged. The unilateral nature of such language flies in the face of a bilateral contract.