Home Buying in Champlin>Question Details

Scott, Home Buyer in Minnetonka, MN

Would you sign this addendum?

Asked by Scott, Minnetonka, MN Mon Jan 5, 2009

My wife and I are trying to purchase our first home. It's a foreclosure and is being sold as-is. All of the vearbage has been about the as is nature of the house. The have just asked us to sign and addendum with the following line item;
13. Seller shall have the absoulte and unilatteral right to terminate the contract at any time prior to and including the day of closing, without cause, upon written notification delivered to the buyer or buyers agent. In the event the seller exercises it's rich to terminate the contract, buyers sole remedy shall be to recieve a return of buyers earnest money deposit and all parties shall thereafter be relieved of all obligations under the terms of the contract.

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6
Scott-
I agree with what everyone else has said. Keep in mind that there is always risk in a transaction. If you love the house you are buying, taking the risk is worth it. We can never give a 100 percent gaurantee that a house will close. Even if the deal doesn't work out, there is always another house out there! Best of luck!
0 votes Thank Flag Link Tue Oct 18, 2011
Scott,

Your answer is very easy. If you want the house you will have to sign this addendum.

I disagree a bit with Micheal that they will simply cancel your offer if another one comes in that is better. While that may have been his experience (and I would love to hear about it if it was) my experience has not been that banks will cancel offers for better ones. They are simply looking for unilateral control of the situation. At the end of the day this clause will not likely be exercised.

It is however a gamble - unless you are on a strict timeframe you really have nothing to lose with the exception of possibly your inspection and appraisal fee, and of course time. You could ask your agent to put together an addendum (don't try to change their paperwork) that overrides this stating that the bank will refund your appraisal fee and inspection fee(and possibly other misc fees that you pay prior to closing out of pocket) if the bank chooses to cancel after you have spend said money. It may fly or it may not but it is worth a shot. If you can get it through then the only thing that you will lose is time.

Cameron Piper
Web Reference: http://www.campiper.com
0 votes Thank Flag Link Mon Jan 5, 2009
Yes, Aaron is right. All control on the part of the buyers goes out the window with lender mediated properties. Sometimes the language becomes just a formality because nothing like what they describe ever happens. But, the elevated level of risk on the buyer's part is an important observation. There is no way to assess how high the risk is because there is no way to tell if/when any of the "what ifs" will come to fruition.

So, you should consult with the agent you hired to help you make the decision to determine your next move. It is standard language in lender mediated properties, at least according to my experiences.
0 votes Thank Flag Link Mon Jan 5, 2009
Scott,

What there are saying is if another offer comes in that they like better than yours they can cancel your purchase agreement and refund your earnest money.
I would not sign the addendum unless you are o.k. with that.
If you don't have an agent representing you I would find one who has experience with foreclosures.

Michael Doyle Realtor
0 votes Thank Flag Link Mon Jan 5, 2009
Hi Scott. Unfortunately, this is a very common addendum when dealing with a bank owned home. Most banks will not continue on with the sale if you do not sign it. I've only had 1 buying client have an issue with such (when dealing with a home owned by Countrywide)...while the remainder of our clients have not had the transaction canceled. You can attempt to not sign it and see what the bank comes back with, but for the most part (especially when dealing with large banks), they usually won't back down. Your agent can help you out with the process of countering them back to attempt to get the result you are looking for.

Don
Web Reference: http://donedam.com
0 votes Thank Flag Link Mon Jan 5, 2009
If you want the house, then yes. It is standard language in nearly any PA I've seen. Banks want to have the right to pull the offer if they need to, though I haven't heard of an occassion that they have unless there's title issues they cannot resolve (in which case any deal would fail).

Of course you should speak with your agent and an attorney if you need legal advise but it is things like this that are the reason you are getting the home for a very good price (I assume).

Nearly all of my clients that have bought a foreclosure have felt mildly violated during the process but after closing and a few months pass they are happy they bought the home.
Web Reference: http://www.AaronSOLD.com
0 votes Thank Flag Link Mon Jan 5, 2009
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