OK. This is a first for me. I have an offer on one of my listings where the buyer's agent has written into the contract that the lender is to repair missing roof trim and any issues that may arise in the home inspection! Geesh!
Anyway, I explained to the agent that the lender is not a party to the contract, the house conveys "as is" etc. but she wants to keep that verbiage in because it will help justify her offer. I'm going to take it out.
Any thoughts?
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I would explain again to the buyer's agent that the house is being sold "as is" and neither the lender nor the seller will be making any repairs. What is it that they don't they get about that? The seller's in distress and losing their home,, and the lender is taking a huge hit. They're not going to make any repairs. If the buyers don't get it, find another buyer!
Sounds like the buyer's agent is confusing this sale with a regular sale. As Is means As Is. I have found a way around a lot of these issues by putting in my short sale addendum attached to the listing that the buyer must do their inspection within 7 days of the SELLER's (not bank's) acceptance of the offer. I offer the buyer half their inspection cost back if I don't get bank approval in 90 days. The buyer would normally pay the full inspection price at the end anyway and risk losing it if they find deal killer issues, but only after 60-90 days of waiting for approval (when they could have purchased something else). This way the buyer will know up front if there are any deal killer issues before we tie up the property during the approval process. This also separates the serious buyers from the ones who just put in offers all over town and take the first one that gets approved. Because I always get approval in 90 days, I haven't had to reimburse any inspection costs, so my offer is a win-win situation for everyone.
I had one transaction where the purchase price was $90K. The buyers did the inspection up front and discovered that it was going to cost approximately $9000 to make necessary repairs on the property. When we submitted their offer to Chase, they coincidentally countered for $9k more at $99K. I submitted a copy of the inspection report to Chase and they accepted the $90K. Not only did doing the inspection up front prevent the deal from possibly falling through at the end, the buyers saved $9k they might have agreed to pay had they not known about the repairs needed. Everyone in this transaction was super happy!
I would not accept the PA at all. As the listing agent, you can counsel your client not to sign it.
Roof trim is normally a minor issue. If she wants other issues found on the inspection to be repaired, have her do the inspection before the offer is submitted to the bank and add the repair costs as a credit to buyers closing costs.
What do you mean "I'm going to take it out"?
You can't change their offer (I had an agent once remove an addendum that was included in the contract... bad bad bad). You can wait for the bank to reject the idea and then write your HUD accordingly. Legally and ethically, you have to go through the proper channels regardless.
I dont think he means white out the verbage. I get verbage like that all the time on an offer and I put one line through it and have the sellers initial. Then send it back to the other agent to present to the buyers.
Short sale or not, the property will still have to meet minimum property standards at the time of closing. If the appraiser calls out a roof or any other required repair, then the transaction cannot close until it has been taken care of. The buyer's agent should have made the repair request of the seller and not the seller's lender. While the seller must obtain lender approval to close, the seller is still the owner of record.
And this is exactly why investor cash offers come in low. Cash investors can and will take the property "as is", which is not always going to meet minimum lender requirements for a conventional loan.
Then the bank yells and screams that they are getting ripped off because the investor fixes up the house, makes it financiable, works within a time frame that allows a conventional buyer to actually qualify and fund a loan, and make a little profit.
Somehow the bank considers it's short sales to be as desirable as a conventional sale, although, in numerous and very significant ways, they simply are not.
The buyer needs to make the repair , and they will if they really want the property. Or just move on to another property.
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