Virtually every bank owned home in the Phoenix real estate market comes with the notation that the home is selling “as is” and that the seller will not make any repairs. Some of the more
haughty gung-ho listing agents even have lamented on their Active Rain blogs that some buyers insist in asking for repairs even after signing an as is addendum. How dare they …
Except some lenders do provide the buyer an opportunity to at least request repairs. And sometimes repairs need to be made should the buyer be financing the property with an FHA mortgage.
Here is a paragraph from one lender’s addendum. (IMPORTANT NOTE: This language applies only to the one home for which it was sent and is specific to a particular lender. DO NOT assume what you see here automatically applies to the bank owned home you may be considering!):
Within five (5) calendar days of receipt of any inspection report prepared by or for the Purchaser, but not later than 10 days from the Verbal Acknowledgment Date, whichever first occurs, the Purchaser will provide written notice to the Seller of any items disapproved. The Purchaser’s silence shall be deemed as an acceptance of the condition of the Property.
The Purchaser shall provide to the Seller, at no cost, upon request by the Seller, complete copies of all inspection reports upon which the Purchaser’s disapproval of the condition of the property is based. In no event shall the Seller be obligated to make any repairs or replacements that may be indicated in the Purchaser’s Inspection reports. (Emphasis added.)
The Seller may, at its sole discretion, make such repairs to the Property under the terms described in Section 7 of the Addendum. If the Seller elects not to repair the Property, the Purchaser may cancel this Agreement and receive all earnest money deposited. If the Seller elects to make any such repairs to the Property, the Seller shall notify the Purchaser after completion of the repairs and the Purchaser shall have 5 days from the date of notice to inspect the repairs and notify the Seller of any items disapproved. The Purchaser’s silence shall be deemed as acceptance.
In short, the 10-day inspection period as written in the Arizona Association of REALTORS Residential Contract still stands. And while the lender’s not obligated to fix anything, the possibility is left open. Why? Because many of these issues, once uncovered, are going to come up again and again and again any time an inspection is done.
Maybe the lender’s willing to take a chance another buyer will overlook the issues and just take the house. Maybe the lender isn’t. And if the lender isn’t, that’s where the negotiation of repairs comes into play.
Since spring training’s in the air around here, think of repairs on bank owned properties as a balk. They happen from time to time. Not often. But they do. And only those who are alert about what to look for spot them when they happen.
[tags]Phoenix real estate, bank owned homes[/tags]