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Zekedog, Home Buyer in Florida

Regarding short sales: Do you typically get an inspection done on a house BEFORE you put in an offer? Or,

Asked by Zekedog, Florida Thu Jun 5, 2008

Is it most common to put in an offer contingent on an inspection?
Thank you so much.

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I suggest to get an inspection done after the offer is approved by the bank.

Short sales are difficult process both from the sellers side as well from the buyers side. It usually take a long, long time for the lenders to respond and then you don't know if your offer will be accepted by the lender at all. You might be wasting your money (which can be several hundred dollars) doing inspection before you put in an offer (and much before your offer is accepted by the lender).

And as Chris said, the lenders usually do allow for inspection period after the offer is accepted. Although you might not get credit back but you will have a chance to back out of contract if there are major problems with the house.

Good luck!
Sylvia
2 votes Thank Flag Link Thu Jun 5, 2008
Sylvia Barry,…, Real Estate Pro in Marin, CA
MVP'08
Contact
I would handle the inspection part of the process just like any other purchase. When you have an accepted contract then you have a certain amount of days to get the inspection (i.e. 7 days). An accepted contract in a short sale would be when the short sale lender has issued an approval letter. At this point, your "due diligence" will start (inspection period). The other thing to consider is that is not uncommon for 30-60 days to go by before you get a bank approval letter which leaves you wondering about the condition of the home that whole time. If you want to know upfront, getting an inspection after the offer is signed by the seller but before the bank approves it would be appropriate. However, it is generally not acceptable to get an inspection before you present an offer to the seller.
1 vote Thank Flag Link Wed Jun 15, 2011
My agent told me that it is routine for short sales in FL to have the inspection done before you present the offer since the sale is "AS IS", that way you know what needs to be fixed, etc, before you write your offer; but it could be done the traditional way (offer contingent on inspection) if we wanted. Comments?
1 vote Thank Flag Link Sun Jun 8, 2008
Since a short sale is involved with lots of time, etc. As an agent, as a Buyer, I would want an inspection either by a builder or certified inspector. Without that, you have no idea what you are buying into. Yes, it will cost a few hundred, however, if you cannot afford that, chances are, you might not want to be going for the "short sale". There are some very costly items, which you would want to know before you waste more time, money on going forward.

Gail Hughes Galli
ghughes@fiteshavell.com
0 votes Thank Flag Link Sun Jan 20, 2013
I would not make inspection first..... Make offer subject to inspection.
Some banks will make statements like "bank will not negotiation on inspection".
More of a take it or leave it attitude... However do not hesitate to ask them to pay if the deal requires it.

Even though they say "no negotiating"... they will most of the time!
Web Reference: http://www.garyyoungman.com
0 votes Thank Flag Link Fri Aug 24, 2012
Alan Sylvia's advice about doing a home inspection after short sale approval is flat out wrong! If a buyer can't afford to invest a few hundred dollars in a home inspection then they should not be investing any time in this type of transaction.

It is no wonder so many short sales do not close when Realtors give out poor advice like this to people. Once a lender approves a short sale it is rare that they will renegotiate based on home inspection issues.

As a buyer why would you want to take yourself out of the market for months to begin with only to find out you don't want the house?

From a seller's perspective it is an absolute no brainer. On any short sale I am listing the buyer has to do their inspection up front like they would in any other transaction. Waiting until after lender approval could put the seller in grave risk of being foreclosed on if the transaction falls apart There is a reason why every short sale I have ever listing received short sale approval. This is over the last 5 years!

I suggest you read the article I provided as a reference.
0 votes Thank Flag Link Mon Mar 21, 2011
Hi Bill, I was wondering if you had any information on short sales. I am looking into purchasing one but my agent has not given me much information. Everything is shut off. My agent said we had to wait 30 days after living in the home to get a septic and well test. Also are we responsible to pay for that?
Flag Wed Feb 5, 2014
Think Sylvia's answer below is right on! I have an accepted offer on one at the price the Bank has asked for. However after the inspection we will at least try to renegotiate the price based on a few items that came up. This sometimes is a game of "cat and mouse" and Banks try to play hardball. If you have a good and legitimate Buyer the Bank will realize that a few dollars does not mean as much, rather then lose a sure thing!
0 votes Thank Flag Link Sun Mar 20, 2011
If you want to walkthru and look at property condition yourself and evaluate possible cost that might reflect the offer price then that makes sence. But to pay for a home inspection on properties where your offer isn't accepted yet means you will be paying home inspectors $350 for each house you "might" put an offer in on. If you have the money to throw away or you have an inspector you want to keep in business this might make sence. I say put offer in contingent on the inspection.
Beth Mitro
702-285-7778
0 votes Thank Flag Link Sun Mar 20, 2011
In Nevada we would not buy an inspection until the offer has been accepted and is in escrow.
Is it most common to put in an offer contingent on an inspection?
YES put in the offer contingent on inspection and loan etc.
Beth Mitro
mitrotem@cox.net
702-285-7778
0 votes Thank Flag Link Sun Mar 20, 2011
When purchasing a short sale the inspection should come prior to short sale approval and never after at least if you want to increase your chances of the property actually closing. There are benefits to both the seller and the buyer in this scenario. See http://massrealestatenews.com/when-to-do-a-short-sale-home-i… for an explanation.
0 votes Thank Flag Link Sun Mar 20, 2011
Zeke,
If you are willing to spring for the inspection, you could have ANY home you are looking into inspected before making the offer. It would be a wise decision to make sure you don't waste your time waiting for approval on an offer only to find out the home won't pass inspection and you are back to square one with lots of wasted time behind you. However this also equals money spent that you will not get back. Our short sale paperwork ensures that contract time periods (ie for inspections and financing) do not start until AFTER there is approval from the lender on the offer.
On the other side of the equation, keep in mind that with longer waiting periods from the lenders, a lot can happen to your property in the interim, roof leaking, mold developing (especially if empty and utilities off), break-in and theft of appliances, piping etc. So now you could potentially have a property that will not appraise well and you will still be stuck with wasted time. At least a pre-offer inspection could tell you if these sorts of problems are more likely to occur in the home while you are waiting for lender approval and you have a little more peace of mind in your purchase choice.
It all depends on how much value YOU perceive in making the inspection up front!
0 votes Thank Flag Link Fri Jun 20, 2008
It is common for real estate contracts to contain continengies for mulitple inspections, including, but not limited to, general building inspections, radon, lead paint, wood destroying insects, and any specialty contractors.

Most contracts which are short sales will contain clauses that the seller will not perform any repairs and there will be not credits, but inspections may be performed and the buyer's right to terminate the contract in accordance to the inspection provisions remains.

Deborah
0 votes Thank Flag Link Thu Jun 5, 2008
Deborah Madey, Real Estate Pro in Brick, NJ
MVP'08
Contact
Regardless of whether the house you're writing an offer on is a short sale, foreclosure or regular listing, don't invest in any kind of inspection until after you're in contract. What if your offer was rejected? Will you do this on every property you write on?

Nearly all offers allow time for the buyer's contingency periods for loan appraisal, approval, inspections. It is the buyer's right. It is expected that the buyer is writing the offer subject to/contingent on an inspection.

Good luck!
0 votes Thank Flag Link Thu Jun 5, 2008
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