Bank Owned As Is Sales Aren’t Necessarily Always As Is

avatarthumbnail.jpgEnough of answering blatant Code of Ethics violations and back to the business of real estate.

When purchasing a bank owned home all of the advertising says that the home is being sold as is and without any warranties. The banks almost always will include addenda that say the same thing in varying degrees of painful detail (what some bank such as Citibank can say in three pages takes Countrywide 16, for instance.)

But here’s a little known fact about the “as is” nature of bank owned homes. As is doesn’t always mean as is. Put another way, even though the bank says up front that it will not make any repairs it still might. You just need to know what to ask.

Let’s say you are purchasing a property where the air conditioner doesn’t work. (Not one where the air conditioner has been removed by copper-hoarding bottom feeders – you knew when you saw the empty concrete pad there was no air conditioning.)

A good listing agent will let the bank’s asset managers know that a property without a working air conditioner will sell for considerably less than one with a/c. Once it has been disclosed that the air conditioner isn’t working, if the current buyer walks away a price change is going to be in order. And even more important – the perception of the decreased value of a property without working air conditioning can be more financially devastating than the cost of fixing or replacing the air conditioner.

Knowing all of this, why wouldn’t you ask for the repair? The bank always can say no, of course. But is it really in their best interest to do so? Probably not.

Keep in mind this works best (if at all) on bigger ticket items. If you’re asking for a screen door to be fixed or outlet covers to be replaced, I wish you the best of luck.

Banks may be terrible at selling real estate, as Teresa Boardman has said time and again, but they’re still sellers. Some even are motivated. Though it can be trying as you work to get a home under contract, once you do the bank’s usually more inclined to work with the buyer they have than the potential buyers that may never arrive.

[tags]Phoenix real estate, bank owned homes[/tags]

Jonathan Dalton

Jonathan Dalton is a 40-plus-year resident of the Valley and has been helping folks buy and sell homes since 2004. He can be reached at 602-502-9693 or info at allphoenixrealestate.com.

1 Comment

  • Jon Christopher 9 years ago

    Great post. Some very valid points made. Banks are owners of property and if they are going to get a sale they may even make repairs or concessions to get a sale just as anyone else would. Real estate short sales present great opportunities for banks to get a house sold and cut their losses although many are too inefficient to get them closed out so they eventually become REO.

    Ed – Link deleted

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