Mike S, Home Buyer in Philadelphia County,...

I'm interested in purchasing a foreclosure property but I'm concerned that I don't totally understand the process. My question is

Asked by Mike S, Philadelphia County, PA Mon Jan 18, 2010

this: If I purchase a property, is the purchase strictly "as is"? After an offer is accepted, is there any window during which I could back out of the agreement due to the results of a home inspection?

Help the community by answering this question:

Answers

9
The specific answer to your question, as stated by previous answers, is yes. You can make an offer on a home contingent on the result of inspections or whatever contingencies you wish to place on your offer. What was not said is that banks can and sometimes will negotiate with a buyer on anything depending on how urgently they want to get the deal done.

I recently helped a buyer client purchase a bank owned foreclosure property. Our initial full asking price offer (which was about 60% below the original listing price) was rejected because of a competing offer. A week or two later, the bank's agent called me and asked me if my client would resubmit their offer as the first buyer had backed out of the transaction. The house had been languishing on the market for about 2 years.

We sat down and crafted a new offer, about $25,000 (over 10%) LESS than their original offer with all "standard" contingencies including home inspection, well, septic, mortgage, and so on. Not only did the bank accept the offer, they countered with things we didn't even ask for. They offered to pay for all the inspections, they even offered a $1000 bonus to the buyer's agent. (Made me happy). The bank was pretty motivated to get the deal done. Turns out, no major repairs were required. The buyer was more willing to remove the contingencies after the inspections due to the willingness of the seller to make concessions up front. I stopped by to see the new home owners over the weekend and their still very happy with the way things turned out.

So, just because a seller (any seller) states in the listing what they will and won't do, don't be afraid to ask for anything and everything. Negotiations between the parties will shake out concessions that will fly and those that won't. This particular transaction worked out quite nicely for everyone involved.

I hope that's helpful. Good luck.

Joe Sheehan
RE/Max Professional Realty
Office: (610) 363-8444
Mobile: (484) 948-0936
jsheehan@josephsheehan.com
1 vote Thank Flag Link Tue Jan 19, 2010
foreclosures are strictly "as is" - but yes, you will have the standard inspection period to back out if needed repairs prove to be more than you can handle.
0 votes Thank Flag Link Fri Dec 9, 2011
You can always write your offer with the inspection contingency. However, every foreclosure is different. Sometimes the lender is willing to pay for certain repairs. If it is listed as is, then you should be ready to take care of the repairs once it is yours.
0 votes Thank Flag Link Wed Jan 20, 2010
You can always write your offer with the inspection contingency. However, every foreclosure is different. Sometimes the lender is willing to pay for certain repairs. If it is listed as is, then you should be ready to take care of the repairs once it is yours.
0 votes Thank Flag Link Wed Jan 20, 2010
Joe (below) gave an excellent answer to you. Foreclosures can be tricky. Make sure you have an agent who has experience in dealing with bank sales. Not all agents know how to handle this.
0 votes Thank Flag Link Tue Jan 19, 2010
Yes you are purchasing as is however you can always make any agreement contingent on a home inspection but would get it done within 5-10 days so you know what you will be dealing with if you move forward.
0 votes Thank Flag Link Mon Jan 18, 2010
Purchasing a foreclosure is not complicated if you understand the process, as you have already noted. "As-Is" simply denotes that the bank will not be making any repairs or repair concessions. Similar to a resale purchase contract, a buyer will usually be afforded the opportunity to inspect the premises, albeit the time limit will probably be shorter, say 5-10 days. Good Hunting!
0 votes Thank Flag Link Mon Jan 18, 2010
The first answer is right on. You can put a building contingency into the agreement, but when you put your offer together it allows for all the issues to be resolved. You have to figure the comps into the number then deduct the repair costs. Whatever number you come up with that is you offering number. I have seen lots of foreclosed homes in our area, and currently even have a few bids in on some. I can walk you through the process if you would like, let me know.


Thank You,
Brian Fletcher
Lincoln Realty
610-312-3158
Brianffletcher@gmail.com
0 votes Thank Flag Link Mon Jan 18, 2010
Yes.

And yes.

When you buy a foreclosure, you're buying it "as is." Take it or leave it.

However, you certainly can do a home inspection and make the offer contingent on an inspection. The home inspection will (hopefully) identify major problems and allow you to decide whether you want to buy it in "as is" condition.

So, you see a property. You make an offer, knowing that the bank will only sell it to you in "as is" condition. You base your offer on the comps, but factor in a reasonable amount of discount for problems that might be uncovered during an inspection. Sometimes they're easier to identify than others. If your offer is accepted, you have the home inspection done to verify the amount of needed repairs. If the numbers still work after the inspection, you go ahead. If they don't, then you exercise that contingency and drop the property.

Check with your Realtor for more information.

Hope that helps.
0 votes Thank Flag Link Mon Jan 18, 2010
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
Contact
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2014 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer