Foreclosure in Maine>Question Details

Cloudorain, Home Buyer in Windham, ME

We were under contract for a foreclosed home. Our contract stated that the bank needed to have the house running so we could do an inspection prior

Asked by Cloudorain, Windham, ME Mon Oct 28, 2013

to purchase. The bank was unable to get the house running and no longer wants to pay the costs in doing so and now will not sign a contract extension. Should ee challenge Should we challenge this or walk away?

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Answers

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Often times the bank will allow the buyer to pay for the cost of de-winterizing but will also require it to be re-winterized by their service people.
0 votes Thank Flag Link Fri Nov 1, 2013
Are you represented by a real estate broker? What are they recommending? When you went under contract, you signed a bank addendum that basically says you (The Buyer) are responsible for everything and the bank/seller is responsible for nothing. From what you say, it appears they tried to meet the contract terms. It sounds like you may have been their only offer as most banks prefer contracts with no inspection contingencies, even if the purchase price is less than other offers they may have received. If it was a good deal, they would have had multiple offers here in my area. Bank-owned properties are most often purchased by contractors/investors who assume they will have to replace or repair all of the systems and they offer a price in accordance with that. You are not in control here. The banks are not humans you can appeal to based on emotion or even reason. If the bank extends, what do you hope to happen? The bank has said they won't spend the money to fix the issues. They can say they agreed to turn systems on for inspections, not make repairs to systems. They can tell you anything to make you go away. Are you willing to take the house as it sits? Does your financing constrain you as to the condition of home you can purchase? Your own real estate broker is the only one who can really advise you as to what to do.
0 votes Thank Flag Link Tue Oct 29, 2013
Here's a little more info. when the bank went to turn the power on the power was fine at the pole but it didn't work inside the house, also the pipes / heating system failed the pressure test. Now that bank is saying they don't want to pay to fix the system and get them up and running. The question is if they signed a contract saying they would turn these systems on can they now say they don't wont to invest the money?
0 votes Thank Flag Link Tue Oct 29, 2013
it is very important to have the systems up and running for the inspections. I've had to inspect both ways and it is too risky to not inspect with water, electricity and heat on. With that being said it can be quite expensive to turn systems on and off... and if the house sits for any amount of time after the inspections it's important that the home be winterized properly to avoid a freeze up. You may have the option to turn the utilities on in Your name for short period of time, then turn them back off. You will likely incur a winterizing fee to drain the water out of the piping as well as the boiler if hot water baseboard heat.

Short Answer: 1. You can challenge and may not get anywhere 2. perhaps you can do it yourself and save time and ensure systems are up and running. 3. Risk it and have a limited inspection done w/o utilities.
0 votes Thank Flag Link Tue Oct 29, 2013
My advice would be based on more info. How badly do you want the home? How good. a deal is it? Is it such a bargain that you can afford repairs after close. What isn't running? It probably won't appraise if it is the heat, electric, or plumbing. If you would like to discuss the options, or other properties in Windham, please reach out to me. I live in Windham and write a real estate column for the local newspaper, so I know that market well
0 votes Thank Flag Link Tue Oct 29, 2013
There's a reason B A N K is a four letter word. You can challenge them, but don't expect them to snap to attention and do the right thing. They're hard to deal with, arrogant and careless. Last sellers in the world that I want to deal with, and not because they are shrewd negotiators...
0 votes Thank Flag Link Tue Oct 29, 2013
Run don't walk away and stop wasting your time dreaming about the deal your going to get buying a foreclosure as your odds of actually getting a good deal are less than 1/2 of 1%

Read the link I've attached below. I am in the business, I have been buying and flipping homes for over 30 years, I have never bought a foreclosed property for myself and while I've helped may buyers purchase foreclosures (always against my advice) I can count on one finger then number of times the buyer actually got a great deal.

If you and other buyers want foreclosures to be an above average deal then it's time to let the banks who have decided to take someone's home away to choke on them for a good long while. This is the only way their going to learn to think long and hard before foreclosing and when they do foreclose they'll be much less arrogant than they presently are about the value of their properties.
0 votes Thank Flag Link Tue Oct 29, 2013
Great question, please feel free to call me and speak about all the reasons you should and shouldn't.
0 votes Thank Flag Link Tue Oct 29, 2013
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