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Emily, Home Buyer in Northern Barton Heig...

Bank-owned property: Seller won't respond to addendum based on inspection report.

Asked by Emily, Northern Barton Heights, Richmond, VA Fri Apr 4, 2008

I have a contract (with an inspection contingency) on a bank-owned property which I understand take more time than usual for negotiations. We got the inspection, found major issues, but couldn't gain access to the attic. Within the time limits (we had 5 days to respond after the inspection), we submitted a request for an extension of the inspection contigency based on the lack of attic access. We didn't hear back so, still within the limit (on the 5th day), we submitted a list of repairs based on the inspection report. It's been over 7 days and we have not heard back from the seller regarding either. Unfortunatly, our contract does not state that the seller has a time limit in which they have to respond to us. At this point, I'd like to back out and get our earnest money deposit back but our realtor said they we are essentially in limbo until the bank decides to respond. Do I have any options other than to sit around and wait?

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You are right regarding the terms of the contract. Not only does it not list a timeframe that the seller (lender) must respond but he does not have to respond at all. If you not satisfied with the condition of the home and truly want to cancel your escrow then have your agent prepare cancellation instructions based upon your inspection contingency and you should be able to collect your deposit back within a reasonable amount of time. Good luck!
1 vote Thank Flag Link Fri Apr 4, 2008
In Northern Virginia the inspection addendum clearly indicates the number of days you have to perform the home inspection and the number of days the seller has to respond once the request to fix or repair any problems found during the inspection is delivered to the seller. In the same way you would have a number of days to respond to seller if their answer is YES or NO to your repair request.
Any time after the days required to respond has expired by either party you can decide to walk away or continue with the purchase of the property.
It is clearly explained on the Home Inspection and Radon Testing Addendum

Freddy Solis
Capital Region
Realestate.com Realtors®
Web Reference: http://WWW.FreddySolis.com
0 votes Thank Flag Link Tue Sep 14, 2010

Out of curiousity, isn't the five day inspection period contingency the timeline for both you and the seller to agree about the home inspection? That is how it works in my market. The time period agreed to for the inspection/remedy is outlined in writing and applies to both the buyer and seller.
0 votes Thank Flag Link Wed Nov 12, 2008
Back out now! If you are within your time periods outlined in your purchase contract you have your full 100% right to cancel and make a claim for your deposit. The bank can take forever and a day to get back to you so don't rely on their competence in contract deadlines. Check your purchase contract to see what time frames you agreed to complete your contingency items by and if your are within your time frame allowed to cancel, then cancel. You do not need to wait for the lender (unless your contract was written in such a way but I doubt it). No more waiting!! If you are sure you'd like to cancel then the sooner the better. Best of luck to you.

Diane Wheatley, Broker
Move Up Properties Real Estate Brokerage
0 votes Thank Flag Link Wed Nov 12, 2008
you have an opened ended contingincy as there is no specified date for the seller to respond. There always needs to be a date and the words time being of the essence. Most bank owned properties are sold as is. You were lucky they even allowed an inspection, i would almost guess someone missed it and is now in trouble for allowing it. With the 6 banks i work with they all stamp the home inspection for the buyers knowledge only, the bankw ill not renegotiate after the buyers inspection, they all have a bank addendum which states it overrides the conventional purchase and sales and outlines inspections. you should re-read all teh paperwork including addendums to check for dates and what they will or will not allow. Your agent should be contacting the bank asking for a response. i usually do not go longer than 24 hours on a response for anything so it is unusuall to have to wait 7 days. good luck with working it out.
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Tue Nov 11, 2008
Most states do not allow home sales in strictly "as is" condition... they must be habitable. This means that they must meet certificate of occupancy requirements for the local jurisdiction. If the heating doesn't work, the roof is leaking, their is mold or other environmental concerns, structural issues, plumbing not working, etc., then the bank cannot and should not sell that property without repairs. Most banks are now pre-inspecting properties and putting a budget in place for repairs, so it is very important that the home inspection process is done, for the protection of everyone in the transaction. Of course, the bank does not have to sell the property. They can wait for some poor sucker to come along and buy the property sight unseen... I have a bridge somewhere that I would lke to sell... and then they will deal with the head aches later with their attorneys.... it is all about the attorneys making the money.
I wish you well.
Allen Blaker
Inspection Specialists for 24 years
Phoenix, AZ
0 votes Thank Flag Link Tue Nov 11, 2008
I'm surprised that they honored the inspection contingency. Most REOs I work with are sold "as-is" Most bank owned contracts I work with will specifically state that their addendums supercide the local MLS contract that the offer may have been presented. The contract will always be slanted in the best interest of the bank. Re-read your contracts/addendums. I find that Wells Fargo/Chase/Countrywide are taking up to 14 days. HUD has been the quickest to respond. I'd get comfortable for another week or so. Also know under what conditions your earnest money will be given back either in part or entire amount. HUD has different provisions for owner/occupier than investor. Some of the banks are more lenient than others
0 votes Thank Flag Link Fri Apr 4, 2008
Welcome to the world of bank owned properties. The hope of instant equity is certainly tempered by the headaches for most potential buyers who dare to enter.
Web Reference: http://bestsellerstl.com
0 votes Thank Flag Link Fri Apr 4, 2008
If you used a residential purchase agreement there is a time limit for the seller to remove all contingencies and repairs have an expiration period, I don't know what time frame you agreed upon, but you are never in limbo. Ask your agent to tell you what time period the seller has to agree or disagree with the repairs. If you have not signed a removal of contingencies, there is no reason you can't terminate the contract.. If you signed away any of your rights, that would be another story.
Web Reference: http://www.johngonnello.com
0 votes Thank Flag Link Fri Apr 4, 2008
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