Any Realtors in the house?

[jinjuku]

Are there any Realtors in the house?

The situation in a nutshell is this:

Saw a nice house. A house that is foreclosed. Being sold as-is, where is. I get that part. It's price is listed with the understanding that it needs a new kitchen. (part of the listing description)

Went and did a long walk through and made an offer (prior to inspection). First question: Is this not how it is normally done?

Prior to inspection we asked for an allowance 'IF' the water heater/furnace needed replaced (due to prior flooding, it happens). They come back asking for that language to be taken out. Again stressing that it is sold as-is. Am I living on a different planet? The house would still be 'As-Is'. We would affect the repair. They would effectively just be reducing the sales price.

After inspection the house does indeed need a new water heater and furnace due to 4 inches of standing water at some point. I get it that basements can flood and stuff gets damaged. That the house is sold 'As-Is'.

Now here is the baffling part: My agent is telling me that the sellers most likely won't lower the price. That we should have offered lower in the first offer. All this prior to not knowing that the water heater/furnace needed to be replaced.

Am I off my rocker?

 

[chris357]

they want to sell the house and be done with it, the bank is not liek a home owner they are already taking a loss on the property and cant build these conditions into contracts. you need to make your offer based on the fact you have unknown expenses. also you need to be honest with yourself that if you cant afford these unkowns then maybe buying a forclosed property is not for you.

 

[jinjuku]

they want to sell the house and be done with it, the bank is not liek a home owner they are already taking a loss on the property and cant build these conditions into contracts. you need to make your offer based on the fact you have unknown expenses. also you need to be honest with yourself that if you cant afford these unkowns then maybe buying a forclosed property is not for you.

That is not the issue. There is no problem with unknown expenses. I know that a furnace will cost $5k. I can put in a water heater myself.

The issue is I have our Realtor hesitating at putting a lower offer in to offset our cost of putting this stuff in. Are you supposed not to get an inspection so you know 100% what you are dealing with? Should you never put any offer in until you have an inspection? From the way contracts read everything is always contingent on the inspection (including the first offer price).

The asking price only reflects that a kitchen needs to be installed. Not mechanicals such as furnace. You don't know these problems until inspection.

The house is slightly under $200k. I have 20% to put down. We are doing this on the premise of live on one income and save the other. Our bank has us pre-approved for slightly more than $400k.

 

[chris357]

what are other properties in the area selling for that are comparible?

my friend bought a forclosure and he barely got an inspection. in fact the house was winterized(sale in may) and they made him pay to have it unwinterized and then he had to pay to have it winterized again before the closing.. I woudl just schedule a time to go to the house to "look" at it again and bring an inspector with you. Also I would say if you want to offer a certain price your realtor should submit the offer..

dont forget they(realtors) get paid on the price the house sells for 3% of 200k is 6k let them work ALOT!!!!!

but again to answer your question the banks want a clear and easy transaction

 

[jinjuku]

what are other properties in the area selling for that are comparible?

my friend bought a forclosure and he barely got an inspection. in fact the house was winterized(sale in may) and they made him pay to have it unwinterized and then he had to pay to have it winterized again before the closing.. I woudl just schedule a time to go to the house to "look" at it again and bring an inspector with you. Also I would say if you want to offer a certain price your realtor should submit the offer..

dont forget they(realtors) get paid on the price the house sells for 3% of 200k is 6k let them work ALOT!!!!!

but again to answer your question the banks want a clear and easy transaction

Do you think I am going to have any push back with a lower offer. That is the question. The worst they can say is no.

As to the comparables there is nothing too recent that is close in composition of rooms/style/sq footage.

I just don't know if we shouldn't worry about 5K. The house price of $190K seems reasonable given if the furnace and water heater didn't need replaced.


Appreciate the feedback by the way...

 

[jamie2112]

What you are asking for is not unreasonable at all.I would think they could lower the price because of the furnace........

 

[chris357]

but at this point the furnace could be fine.. this is why you need to ask to go look at the house again and bring an inspector with you. even then the furnace could die.. i would figure out your drop off point for this house .. if you can buy it for X and accept any future failures .. then done put in that offer and see if they accept. if not walk away

 

[griffinconst]

My experience with as is sales is just that. The seller will spend no money and fix nothing. In a normal sale you can have an inspection contingency but not on as is sales. I know it seems unfair but you have to pay for the inspection up front, find out what needs repair, then make your offer.

Remember your realtor works for you. Tell him/her to remove the repair language and change the price to the number you like. If the bank won't deal, let em keep it. If it's still on the market in a month or two, try again.
Good luck to you.

 

[jinjuku]

Thanks guys.

The Realtor wasn't being clear on 'as-is'. I don't believe they had a real good idea of how the 'as-is' process works. That worries me a bit.

 

[The Dukester]

No, that isn't typically how it's done with an as-is foreclosure sale. As-is is just that; as-is. You can inspect all you want before hand and make an offer accordingly, but don't expect the bank to counter offer if you find something after the offer. It is a foreclosure, not a regular sale where you could use the findings for leverage/bargaining.
I would agree with Griffinconst in that your realtor works for you. If you didn't offer any contingency money, you should be OK. If you did and you decide to back out, you will most likely lose your money. If you didn't, then make them an offer with a contingency for the price you want to pay no matter what you may have to fix after the fact. If you buy it, you get what you get.
I've been to some foreclosure sales here in upstate SC and the ones the banks aren't buying back are selling for about .50 on the dollar of the judgement amount unless the loan is older. One house sold for double the judgement but it was still about 1/2 of what it should be worth. Now is a good time to buy.
Good luck!

 

[chris357]

Thanks guys.

The Realtor wasn't being clear on 'as-is'. I don't believe they had a real good idea of how the 'as-is' process works. That worries me a bit.

find a realtor that specializes in forclosures or short sales.

 

[jinjuku]

No, that isn't typically how it's done with an as-is foreclosure sale. As-is is just that; as-is. You can inspect all you want before hand and make an offer accordingly, but don't expect the bank to counter offer if you find something after the offer. It is a foreclosure, not a regular sale where you could use the findings for leverage/bargaining.
I would agree with Griffinconst in that your realtor works for you. If you didn't offer any contingency money, you should be OK. If you did and you decide to back out, you will most likely lose your money. If you didn't, then make them an offer with a contingency for the price you want to pay no matter what you may have to fix after the fact. If you buy it, you get what you get.
I've been to some foreclosure sales here in upstate SC and the ones the banks aren't buying back are selling for about .50 on the dollar of the judgement amount unless the loan is older. One house sold for double the judgement but it was still about 1/2 of what it should be worth. Now is a good time to buy.
Good luck!

We made an offer with 1% earnest money. BUT we asked for a $5K allowance pending inspection of the water heater and furnace. Which they turned down. So we are free and clear of any contract.

The real issue is that at the outset when we made our initial offer we were not told it was as-is. It took a weekend for the listing agent to come back and tell us that.

So I am back to the question: Are we fine for countering with a lower # to compensate for a few defects in the property?

 

[Nemo128]

No realtor worth a damn will ever refuse to submit your offer unless it's completely unreasonable, like trying to offer $10k on a house priced at $100k. If you're trying to drop $5-10k because of your inspection results, your agent should get it done. If they don't want to, you should find a new agent. One agent told me this about foreclosures the woman and I were looking at: "You guys have great jobs and a place to live. You don't need to buy right now, but the bank needs to sell so the ball's in your court."

Yes, counter with a lower number. You're not under contract, you can offer whatever you want and they can refuse whatever they want. Right now with the state banks are in, most are not willing to refuse a reasonable offer for something that isn't selling.

I would do some property research. Find out exactly how long it's been on the market, what the owed balance was at that time, the rate of dollar decline from then till now, and the average asking prices for homes in that area of the same build year and type. Using those figures you should be able to come up with the offer that's most advantageous to you and most acceptable to the bank.

And thanks for the non-political thread. Nice to finally see one of those in the Vent.

 

[chris357]

No realtor worth a damn will ever refuse to submit your offer unless it's completely unreasonable, like trying to offer $10k on a house priced at $100k. If you're trying to drop $5-10k because of your inspection results, your agent should get it done. If they don't want to, you should find a new agent. One agent told me this about foreclosures the woman and I were looking at: "You guys have great jobs and a place to live. You don't need to buy right now, but the bank needs to sell so the ball's in your court."

Yes, counter with a lower number. You're not under contract, you can offer whatever you want and they can refuse whatever they want. Right now with the state banks are in, most are not willing to refuse a reasonable offer for something that isn't selling.

I would do some property research. Find out exactly how long it's been on the market, what the owed balance was at that time, the rate of dollar decline from then till now, and the average asking prices for homes in that area of the same build year and type. Using those figures you should be able to come up with the offer that's most advantageous to you and most acceptable to the bank.

And thanks for the non-political thread. Nice to finally see one of those in the Vent.

i agree on all points

 

[ragged]

You made an offer, bank refused based on furnace/water heater clause, no contract, you can walk away. Good news, you can at least reasonably assume that the price you offered was acceptable, it's the clause that bothered them. Take out the clause and offer 10k less than your first offer, see what they say.

 

[jinjuku]

You made an offer, bank refused based on furnace/water heater clause, no contract, you can walk away. Good news, you can at least reasonably assume that the price you offered was acceptable, it's the clause that bothered them. Take out the clause and offer 10k less than your first offer, see what they say.

Yep that is exactly what we are doing. Thanks for all the help.

While I like our Realtor (seriously hard working) I just needed a better explanation. I think it is simply an experience thing.

 

[griffinconst]

You made an offer, bank refused based on furnace/water heater clause, no contract, you can walk away. Good news, you can at least reasonably assume that the price you offered was acceptable, it's the clause that bothered them. Take out the clause and offer 10k less than your first offer, see what they say.

+1 for this advice. Sounds like that is what you're doing.
Good luck and keep us informed.