Agent2Agent in 22031>Question Details

Jcosta, Home Buyer in 22031

We are considering purchasing a short sale. What recourse does the buyer have to prevent the owner from taking appliances, light fixtures, etc...?

Asked by Jcosta, 22031 Tue Mar 13, 2012

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Make sure you specify in your offer what personal property is to convey (stay) in the property.
1 vote Thank Flag Link Mon Apr 16, 2012
You raise a good issue. The other answers here are correct, of course. The contract specifies what's to be conveyed. The seller should be aware of what he/she has agreed to, and should be prepared to abide by that contract.

Unfortunately, the operative word is "should." There's sometimes a big gap between what should happen and what does. As a practical matter, yes, owners strip houses. Those who do likely are angry--at the lender, at the person they bought the home from (for, in retrospect, charging too much), themselves (for having paid too much), their previous Realtor (for having represented them in a situation that hasn't turned out well) . . . and the buyer (who is paying less for the house than the sellers paid).

So some strip the property. Or they'll do things like take the nice refrigerator and replace it with a mini. They figure that because they're not allowed to walk away with anything, why should anyone else benefit?

There isn't a lot of recourse. Beforehand, the listing agent should clarify with the seller what's to remain in the house. And the agent should point out that if the sale falls through, that the seller might be looking at foreclosure, instead. (A point nicely made by Sonal.)

It's a gamble. Just another gamble for those purusing short sales.

Hope that helps.
1 vote Thank Flag Link Tue Mar 13, 2012
Don Tepper, Real Estate Pro in Burke, VA
I am always curious why some of these postings show up makes me think folks have little confidence in their agent. Would you take a moment to tell us why you came to here IF you have an agent..

IF you don't then that's good reason. A good agent will be able to properly guide you as to the shortfalls and possible upside of a short sale. Might I suggest working with someone EDUCATED in short sales and EXPERIENCED. This is no place to be the guinea pig. Look for a CDPE..who has the extra training..CDPE..means Certified Distressed Property Expert..However, it does not actually make one an expert. Experience helps to qualify..

The contract is like most "normal" contracts with verbiage regarding utilities appliances etc. It is typically an "as is" but also remember..the seller wants to make it work too. They have a vested interest to keep things on track.

Good luck and if you need help let me know!

Kind Regards,

Erik J. Weisskopf,ABR,CDPE,CRS,GRI
Re/Max Distinctive Real Estate
1 vote Thank Flag Link Tue Mar 13, 2012
I would also list the model and serial numbers of the appliances that are in the home and put into your contract. For example the GE Profile refrigerator serial # is preferred to just refrigerator. This way you can be sure the appliances you expect to get will be the appliances in your new home when you do a walkthrough BEFORE closing.
0 votes Thank Flag Link Thu Apr 12, 2012
If your contract states that this comes with the home then it comes with the home. Be forewarned that does not stop an owner from selling the appliances or taking them but you MUST do a final walk thru prior to closing and if they are missing don't close.
0 votes Thank Flag Link Thu Apr 12, 2012
In the beginning of the transaction,i.e., when you are making your offer-your agent will most likely suggest an addendum of some sort, with items that you want to convey with the property. If you miss this step in the process, you will not have a legal leg to stand on. In the end, if the owners decide to breach the contract, you may find yourself in court. It is your agent's job to make sure all bases are covered.
0 votes Thank Flag Link Thu Apr 12, 2012

I don't see how having your CDPE prevents a seller from breaching the contract. The seller can still make off with the appliances and breach the terms of the contract regardless of the qualifications of the agent. I'm curious about what power you think a buyer agent with a CDPE has to enforce a contract when the seller doesn't follow the terms? In most states, this would be up to a judge to decide the outcome.

Glen laid out your realistic choices. In Oregon, this would most likely be handled in small claims court after the fact. While you as a buyer would likely get a judgement, getting the money is a whole other ballgame.
0 votes Thank Flag Link Wed Mar 14, 2012
Guys, here's the bottom line. You have no recourse other than not closing the transaction. Talk with your agent and get his advice. Remember, the reason this seller is selling as a short sale is because he is facing foreclosure. Unattached appliances may easily be considered personal property. Attached light fixtures generally aren't. Write in your offer what you want and if it isn't there when you do your final walk through don't close. But, as always, if you're working with an experienced agent trust his advice.
0 votes Thank Flag Link Wed Mar 14, 2012
It's a great question. This exact scenior happened to my client. It was discovered during final walk-through that all of the appliances were gone. The listing agent contacted her client that responded that he had sold all of the appliances to get some cash since the lender would not allow him to net any proceeds from the sale. The seller was not willing to pay the buyer for the appliances. Option 1, the buyer's recourse was to declare the Seller in default and litagate. The Seller has no money, not a realistic option. Option 2, The buyer could walk and void all of his time and investment in the house. Not an option either since he was still receiving a good value. Option 3, Move forward with closing and mark it up to experience. That is the nature of the Short Sales. Was the buyer disappointed? Sure. Did he still get a great value? Definitly. If your are not willing to take the risk do not buy Short Sales or Foreclosures.
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0 votes Thank Flag Link Tue Mar 13, 2012
You're no more at risk than you would be with a regular sale. Just make sure you're clear with all inclusions and have the sellers sign so they are aware of your expectations.
0 votes Thank Flag Link Tue Mar 13, 2012

The buyer's recourse is pursuing performance by the seller in accordance with what is in the contract of sale. Be sure that the inclusions/exclusions are filled out correctly. If this is a concern a few saved pictures of the interior from the time of contract are good to have as evidence. Most sellers will not take appliances out if they feel it could hinder their lien being released; tenants can be more of a concern if negatively affected by visits to the property and the sale shortening their lease. The appliances can become compensation when the owner cannot afford to refund the security deposit.
0 votes Thank Flag Link Tue Mar 13, 2012
Hello Jcosta,

Practically speaking, the concept of suing someone that doesn't have any money seems problematic. However, technically speaking, when you write the offer and list the personal property that conveys with the home, those items have to be in the home when you close, in order to be compliant with the contract.

Another practical consideration is that in a short sale, the seller is voluntarily doing the short sale, in order to avoid the more negative consequences of the foreclosure, from the seller's perspective. So the seller should be motivated to comply with the terms of the sale and should want to avoid giving the buyer reasons to back out of the contract. It would take an unusually dense seller to actually remove personal property in a short sale and upset the buyer. It is ultimately not in the seller's best interest to do this.

Keep in mind that a short sale is very different from a foreclosure, from the seller's perspective. In a foreclosure, the house is taken by the bank, and the seller doesn't know who will purchase the home, so they may be more inclined to damage the property, if they are that type of person. It's still not right, but may feel "victimless" to the seller. It is very different in a short sale, as described in the previous paragraph.

0 votes Thank Flag Link Tue Mar 13, 2012
If the sales contract used is a current suggested form from the Northern Virginia Association of REALTORS, the seller is contractually bound to deliver the appliances and fixtures described in the contract. A wise buyer should conduct a home inspection and record the model and serial numbers of the appliances. Taking pictures is also helpful. There are other protections contained within the NVAR sales contract to discourage the seller from behaving badly. I strongly suggest you consider hiring a competent buyers agent to help you manage the elevated risks involved with short sales.
0 votes Thank Flag Link Tue Mar 13, 2012
A short sale is an "AS IS" condition sale. Therefore, your contract should determine the date of the AS IS condition. The majority of short sales that are accepted by the controlling 3rd party, the lender,go through without any contingencies, except appraisal, whatsoever, including a home inspection. Therefore, what I would do is hire a home inspector before writing a contract, get an inspection report, and make the contract state that the condition of the home is to be as of the contract date at settlement. The "walk-through" provision protects you against theft of appliances, etc. Your contract must specify the appliances to convey.
0 votes Thank Flag Link Tue Mar 13, 2012
Jcosta, are you using a standard contract? Your agent should have wording in the contract or an addendum addressing items that convey and in what condition they convey - even on a short sale.
0 votes Thank Flag Link Tue Mar 13, 2012
A well written out contract is the key to avoid any errors when purchasing a home.
Agents and buyers regarding of their financial situation are bound to the same ethics and rules of the contracts.
0 votes Thank Flag Link Tue Mar 13, 2012
The contract that realtors use have a section that clearly indicates what comes with the house. So if there are 6 ceiling fans installed you mark yes and the # . You must do a walk through prior to settlement and make sure the seller has moved. Do not close on a short sale with a seller doing a rent back as you would have to evict them should they stay longer than indicated. There are $0 going to a seller at settlement.
0 votes Thank Flag Link Tue Mar 13, 2012
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