Purchasing as is home from Freddie Mac. Broken sump pump, furnace, exposed wiring, Will they fix?

Asked by Alice Downing, Chino Hills, CA Wed Oct 6, 2010

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J Mario Preza’s answer
J Mario Preza, Agent, Daly City, CA
Thu Dec 16, 2010
Most purchases leave a lot to be desired in the way of what you want and what you might get. However, a Freddie Mac home sale has some provisions to make repairs when it involves "health and safety" concerns, and usually after inspections have been done.

If you see issues with the target house and they have been disclosed or noticed by the listing agent as being as is, where is, then this house may not suite you on that level. I would say check it all out thoroughly because you will not get too much help and cooperation from the seller or seller's agent after the close. So, if you find something that needs to be fixed, put your requests/conditions in writing (on the contract or addendum) to be given the right consideration. You may be pleasantly surprised. However, don't discount the possibility that someone else might also like the house and buy it "AS-IS" -- the preferred method of sale through such programs.
0 votes
Gilbert Rich…, , Santa Clara County, CA
Wed Oct 6, 2010
Not usually. You will usually need a rehab type loan and put 25% down to get things fixed that may affect financing.
0 votes
Robert Nowak, Agent, Chicago, IL
Wed Oct 6, 2010
Typically banks will only pay for repairs needed to keep the property in it's current condition. They may patch a leaky roof, pay for mold remediation, secure the property, etc. Banks are not in the property management or repair business and price properties to sell quickly in their current condition 'AS-IS'. It's unlikely they are willing to do any repairs and your offer should have taken this into account.
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Helen Kwong, Agent, Berkeley, CA
Wed Oct 6, 2010
Hi Alice,

As all REO (bankowned) properties are "as-is", meaning you are purchasing that property exactly the way it is. They mostly will not be doing any repair for you. If you already has a selling agent that represent you. He or she should carefully go over the contract and all the documents with you to make sure you completely understand what you are agreeing to and signing off on.

When the bank accept your offer. They will have pages in their contract making sure you know that they have never seen the properties before, they do not know any history of the property.....etc. Your agent should also go over those document thoroughly with you.

Also make sure to have home and termite inspections done to access what needs to be repair or upgrade to your standard. If the repair total add up to more than you expected or are willing to accept, you can always ask your agent to renegotiate with the listing agent (agent that represent the bank) to a lower purchase price. I have successfully helped many buyers done that with REO properties and got the purchase price reduce.

Hope I helped you answered some of your concerns.

Good luck!

Helen Kwong, Realtor
(510) 846-6989
helen@helenkwong.com
0 votes
David Tapper, Agent, Burlingame, CA
Wed Oct 6, 2010
Not likely. Most sales are AS-IS. You can ask, but don't count on it.

One other thing, you may have a problem with the appraisal if the wiring is exposed.

Good luck,

Tap
0 votes
Shawn G. Was…, Agent, Saint Petersburg, FL
Wed Oct 6, 2010
No, the "as-is" you mentioned in your question means that you are buying the property at the price you agree to in the condition it is in. Just make sure you offer a price low enough for you to be comfortable in paying for the repairs yourself.

Shawn Washinko, GRI
Rutenberg Realty, Inc.
Clearwater, FL
(813) 258-1242
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