Foreclosure in Sonoma County>Question Details

KO, Home Buyer in Sonoma County, CA

Will short sale seller clean up messy house before closing?

Asked by KO, Sonoma County, CA Sat Feb 5, 2011

We just put in a offer on a great home, it is a short sale home. We offered asking price, our agent thinks it may be a forclosure now, not sure yet. The house is trashed with stuff (garbage, furniture, toys.....etc......) oh and a bunch of mouse droppings. Will we have to clean up all the mess if it is a short sale? what about if it is a forclosure? We wouldnt mind cleaning it up, we just want to know now.

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In a short sale situation this is a negotiated item. Only the listing agent and the seller can answer this question. Unfortunately your only leverage is to offer the seller an incentive to remove all their personal property or threaten to back out of the purchase. I'm sure your agent has a team of professionals that he or she works with and it would be a good idea to get a bid to remove the items and a bid to clean up the house. This way you have a solid dollar figure of this "damage" to the property. If your agent's trashout and cleaning crews give you a bid for $500 or $1000 are you going to walk away from the purchase? Try not to make it an emotional issue no matter how offensive you find the situation. Make it a bottom line issue. Adding in these additional clean up costs, is the house still worth the money?

If this were a Bank owned property (REO) it would also be an "as is" sale. If you viewed the house in the condition you described then you should assume it will close escrow in the same condition. When you write your offer ask for the house to be free of all personal property. You can always ask and they can always say no but then you know from the day you open escrow what to expect and this tends to make the situation easier. The unexpected and undisclosed are where real estate transactions get nasty. Best of luck in your transaction and congratulations on being able to purchase in this market!
1 vote Thank Flag Link Sat Feb 5, 2011
You should plan on buying the property as-is. If it gets cleaned up, you can be pleasantly surprised.

We are a professional short sale service and would be happy to explain the process to you. Please call us directly to discuss your specific situation. We look forward to hearing from you.

Eli Givoni, Director
Short Sale Department, LLC
561-361-1909
info@shortsaledept.com
http://www.shortsaledepartment.com
Serving all 50 states
1 vote Thank Flag Link Sat Feb 5, 2011
Also be prepared for all of the appliances and light fixtures to be removed before closing. This happens frequently with a short sale.

Even if you have it written in the contract that these items will stay, it will be very difficult to enforce it with a distressed seller.

You need to assure you are getting a bargain on a short sale so you can compensate for these potential costly problems.
0 votes Thank Flag Link Sat Feb 5, 2011
Did you put that statement in the contract - for the seller to clean the home and remove all items? You agent thinks it may be a foreclosure? Did the sellers lender approve the contract as a short sale? If not, you may have no deal if it was contingent upon lender approval. If it has been foreclosed your signatures are with the seller not the new owner - the bank. Have your Realtor get answers.

Phyllis Crosby, Realtor
ReMax Realtec
Tampabay, Florida

813-886-2356
0 votes Thank Flag Link Sat Feb 5, 2011
KO

If it's currently as bad as you have described, then I think you can count on doing all the cleaning yourselves.

If it ends up as a foreclosure, most lenders do address the property somewhat upon gaining possession.

Oggi Kashi
Web Reference: http://www.oggikashi.com/
0 votes Thank Flag Link Sat Feb 5, 2011
It looks like everyone is in agreement that it is what it is. You can have your agent work with the selling agent to try to get it clean. I have represented a lot of sellers of short sale properties and had only one who just walked away and left it a mess. Maybe you will get luckly but if they have already left the property I would guess that it is the way you will get it. Good Luck.
0 votes Thank Flag Link Sat Feb 5, 2011
Whenever you buy a house that's being foreclosed on, there's risk that it's not taken good care of. That's the reality since the seller usually nets zero from the sale. He doesn't have any incentives to look after the house. I don't know if there's a big difference in terms of the conditions of the house, foreclosure v. short sale. But i tend to believe that houses sold as short sales tend to be in better conditions than the ones went to foreclosure sale. Sellers are not responsible for the cleanup unless you put it in the purchase contract. In California, most properties are sold "as is".
0 votes Thank Flag Link Sat Feb 5, 2011
Bottom line with short sales and foreclosures ... buyer beware! Not only will you have to clean up the former owners' mess, but you will also inherit all of their maintenance problems and repairs. Foreclosure properties and/or short sales are sold "as is." The only time they make sense is 1) You can wait months before occupying the property; 2) if the property in an area likely to appreciate within the next few years; 3) If you have gobs of money (aka, iquid capital) to make improvements. For young homeowners, just say "no"! Find a home that has a good location and is in good condition. The higher price will be well worth it in the end! Julie Montgomery, RE/MAX Masters, Inc., Littleton, CO, http://www.littletonhomesrealty.com.
0 votes Thank Flag Link Sat Feb 5, 2011
@Steve - Good points of clarification. Verification of condition is not a way to "back out" or cancel the contract unless specifically written and agreed to by both parties. However, if the seller indicates (bank or private) that they plan to have all cleaned up by a certain date, verification of that prior to close is better than finding out the day of closing. I reiterate that cleaning up the mess is one of the potential risk with any purchase.

CJ
0 votes Thank Flag Link Sat Feb 5, 2011
KO,

To be on the safe side, include your intentions in the negotiations process and do so in writing. Most short sales are "AS IS" transactions but it wouldn't be expecting the sellers to clean up after themselves....BUT, be sure to spell it out!

Good luck,

Bill
0 votes Thank Flag Link Sat Feb 5, 2011
Sad but true - if the home is already a mess, then the seller has given up. They are losing their home, and unfortunately with that often goes their dignity, their will to take care of anything, etc. The chances of them leaving it in better condition than the condition they are presently living in, are slim to none.

Also, remember, the owner/seller has no money. If they did, they would not be in default (you indicated that the home "may be a foreclosure now") and they would not be selling their home. So, in addition to what you can see, there might be other problems that are not visible - caused by deferred maintenance due to their financial condition.

I highly recommend that you get a physical inspection - and I would do it sooner rather than later. If they home is this messy, what might you possibly find in the attic, crawlspace, plumbing and electrical. Make sure that your offered price takes any repairs and deferred maintenance into consideration. Then make sure that your agent communciates the costs of repairs to the listing agent, in writing (contractor repair bids are always nice) so they can forward this information to the short sale lender. Be careful that you only include repairs, not upgrades. The bank does not care if the toilet is old, just that it is functional.

Good luck. Proceed with caution and full information. Sounds like this might be a great home for you and your family, once it is cleaned up and repaired. Dare to Dream.

Shel-lee Davis, QSC®
Certified Distressed Property Expert – CDPE®
Short Sale & Foreclosure Resource – SFR®
Certified HAFA Specialist – CHS®
SSG Pro®
Your Real Estate Consultant for Life
RE/MAX Palos Verdes Realty
424-2HELP12 (424-243-5712)
myrealestateanswers@gmail.com
http://shel-lee.listingbook.com
0 votes Thank Flag Link Sat Feb 5, 2011
KO,

You and your agent can try to be proactive about this through communication with seller and their agent to try and get them to do "the right thing," but the bottom line is most likely it is going to be delivered to you the way it is now. The seller's financial world is cratering in, and there is no incentive for them to clean up the place as they no longer have any financial interest in. Steve is correct, the only way to insure it is to make it a contingency of the deal through a separate contract addendum that allows you to back out of the deal if it is not cleaned up properly. But you will have to be very specific about what you want done, although I think the chance of getting a bank to accept such a contingency is unlikely.

This question has been asked a number of times in this forum, and the best advice I can give you is make your offer price based upon the condition it's in. Any cleaning/junk removal after that will be a bonus.

Best Regards,

Lance King/Owner-Managing Broker
lance@fixedrateproperties.com
415.722.5549
DRE# 01384425
0 votes Thank Flag Link Sat Feb 5, 2011
Listing agent would know if it went to foreclosure.

Most of these properties are listed purchase As - Is you can have your buyers agent in special provisions request for these concerns be addressed.

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
972-699-9111
http://www.lynn911.com
0 votes Thank Flag Link Sat Feb 5, 2011
Hi KO,

With the Short Sale expect "what you see is what you get" and you won't be disappointed. You will most likely end up get something between "Cleaned Out" and "Cleaned Up". The same is true of the REO depending on the bank and the Agent handling the listing.

Also, the ""verification of condition" X number of days prior to close of escrow" (Para 16 of RPA) topic that CJ brings up is NOT a contingency of the contract (unless the buyer is successful in making it so via an addendum). In fact, the standard CAR purchase contract defaults to the property being sold in its "PRESENT physical ("as-is") condition at the date of acceptance" (see Para 9) ---> So, put any agreement as to the agreed turnover condition in writing between buyer/seller. However, understand that if we are talking about an REO, the property will most likely be sold "AS IS WHEREIS WITH ALL FAULTS".

Best, Steve
0 votes Thank Flag Link Sat Feb 5, 2011
KO -

If it is vacant, most bank owners will complete a "trash out" before close of escrow. This isn't a thorough cleaning by far, but simply a haul away of furniture and trash in the yard.

However, if it is occupied or is a short sale, any clean up is between the seller and you. That is why it is very advisable to make part of your purchase contract a "verification of condition" X number of days prior to close of escrow.

This is a challenging situation for most short sales and one of the risk involved in purchasing a short sale. You may ended up literally taking it - AS IS.

Good luck,
CJ
Web Reference: http://www.TalkToCJ.com
0 votes Thank Flag Link Sat Feb 5, 2011
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