Home Buying in Glenview>Question Details

Chald, Home Buyer in Bellevue, WA

I am a first-time buyer and found a nicely priced REO property but am nervous about buying it "as-is". What kind of precautions should I?

Asked by Chald, Bellevue, WA Tue Jan 31, 2012

take? The property is a condo and it looks like the bank has put in some work into the property to clean it up. Should I have an inspector look at the property before putting in an offer or have a real estate attorney review my offer BEFORE the offer is submitted?

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11
Chald,
It's an REO! You are getting a great buy...or at least should be.
The purchase price very likely reflects the need for a new HVAC, hot water heater and appliances. Most likely flooring also. Unless you know otherwise, you should budget into the acquisition cost the need to replace all of these. If you find out later they work...JOY!

Now, you must examine the structural integrity of the building. If over 15 years old, look for stress cracks at windows and load bearing passageway. View all doors, closed, to observe if they are square in the frame. If not..something may be shifting. This is a situation you can not budget for.

Finally, you must know the financial stability of the association. Obtain and read the minutes of previous meetings. You are looking for clues regarding future community repairs that may result in a community assessment. Now you must know how to analyze the community reserves. You need to know total number of units, monthly reserves paid by each owner, %of rentals, and number of delinquents. A recently sold waterfront condo in my area of Florida came with a $64,000 assessment. JOY!

Your real estate professional will be able to walk you through all of these elements.
Best of success in acquiring your new condo
Annette Lawrence
Broker/assoicate
ReMax Realtec Group
Palm Harbor, Fl
727. 420. 4041
Web Reference: http://www.MyDunedin.com
1 vote Thank Flag Link Wed Feb 1, 2012
Work with an agent and together you should look the unit over carefully before making the offer. Also, in any shared ownership situation, it is wise to know the underlying financial strength of the common whole - so have the agent help you with due diligence on that front. I would definitely recommend that you protect yourself with an inspection contingency in your offer. Though the bank is making it clear that it is selling the property 'as-is", the inspection contingency gives you the "out" should you discover something significant during inspection. And though the bank is unlikely to fix the issue, you can always ask, and if it is a problem that will get in the way of any transaction, then they may respond. But if they do not, then you are protected by the contingency. Some banks welcome a pre-offer inspection so ask. Whether before or after the offer, it will be money well spent.

Good luck to you!
Jeanne Feenick
Unwavering Commitment to Service, Unsurpassed Results
1 vote Thank Flag Link Wed Feb 1, 2012
You should defiantely walk through the condo prior to putting in an offer and looking at it like an inspector, if you do not have any sense of structure or mechanicals you should bring someone withyou. In a condo most major things are covered by the HOA. You will be mainly looking at the interior. Turn on all faucets, ;look for leaks, flush teh toilets, turn on showers, run teh appliances, turn on the heat and ac unit. look at walls and ceilings for stains, cracks or mold anbd check the basement for signs of water, mold or insects. You can always make the offer contingent upon a home inspection, but most banks will not rengotiate after they accept an offer. Your best chance for getting teh best deal is with your initial offer and making sure it accoounts for anything you see in your informal inspection.
Web Reference: http://www.ScottSellsNH.com
1 vote Thank Flag Link Wed Feb 1, 2012
You could ask the listing agent if they would allow an inspection prior to submitting a contract, but most buyers use an inspection contingency as part of the purchase agreement. This would allow for you to have the home inspected AFTER submitting an offer, while still protecting your right to exit the deal should the inspection reveal something you don't like.

With condos you would want to find out of there are any past due HOA fees or pending assessments. Ultimately you want the bank to pay any past due HOA and any pending assessments and HOA liens. Proposed assessments (those assessments for which there is no dollar figure at the time of purchase) would be YOUR responsibility. So you would also want to know if the HOA is planning a big expensive assessment after you take possession.

If you're not using a real estate agent, you will probably want an attorney to review your offer prior to submission. There is often additional paperwork associated with a bank owned sale and the paperwork has to be filled out completely and perfectly or your offer will not be submitted by the agent to the bank. A real estate agent would have access to the additional needed forms as they are often posted as a supplement on MLS.

And with any purchase (especially a bank owned property) get title insurance for both your lender (lenders policy) AND yourself (owners policy). Should there be any issues that arise after closing, the policy will help to indemnify you against the cost of fixing title and other issues.
1 vote Thank Flag Link Tue Jan 31, 2012
.Find out what a traditionally priced unit in that building typically sells for today, do a home inspection and check out the financial well being of the condo before you commit yourself. Good luck.
0 votes Thank Flag Link Thu Feb 2, 2012
Hi Chald, you always need to do your homework on any purchase. 1. get an inspection 2. check the condo Docs 3. check the meeting minutes for the condo association, if there is a problem it will be brought up at one of these meetings.
0 votes Thank Flag Link Thu Feb 2, 2012
Get a home inspection..view the condo documents
0 votes Thank Flag Link Wed Feb 1, 2012
What does your Realtor say about this subject? Condo’s can be hard to finance, REO’s are the bank’s way of cleaning up someone else’s train wreck. Just have a heart-to-heart conversation with your Realtor about an exit strategy. Most (all) first time home buyers only think about getting in, not one thought about when they will sell down the road. Good luck,
0 votes Thank Flag Link Wed Feb 1, 2012
Hi, the good thing about a condo is any structural issues are covered by the association. You are typically responsible for the interior, because you own the unit (unlike a coop). It's always wise to have the unit inspected and may be worth it prior to making an offer, this way you offer with confidence. Otherwise you will be wondering if you are paying to much, especially without knowing what you are getting into.

Chris
0 votes Thank Flag Link Wed Feb 1, 2012
Hi Chald,
I agree with the previous answers of inspecting the property after an offer is accepted. Why spend the money on a home inspection when your offer may not be accepted. Get it in ecrow first.
Good luck,
0 votes Thank Flag Link Tue Jan 31, 2012
You should put an Offer in and then have a inspection. After the inspection you will know what may be wrong with the property and get estimates for those repairs to determine how much money it will cost. If you feel after the inspection there is too much work and the price you offered added with repairs is too much you can cancel as long as you are within your contingency period. Even in a Bank Owned property the Buyer has the right to back out of the deal within the agreed upon contingency period. If you can use a experienced agent they can help walk you through this process as it is different than a standard sale.
0 votes Thank Flag Link Tue Jan 31, 2012
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