It is standard practice with bank owned homes that you agree to buy the home as is. That does not prohibit you from having a professional inspect the home for defects but does suggest that the bank will not pay for any repairs. In the case of foreclosure homes an inspection is mainly to determine if there are serious enough defects that would be cause for cancelling the purchase.
But recently I have found, at least in one case, “AS IS” may not be the last word.
Here is what happened; my client submitted an offer on a bank owned home in Avondale. After a short negotiation period we came to an agreed upon purchase price for a home with the bank who owned it. An inspection was ordered which turned up a serious problem with the air conditioning units, both of them. Time to cancel?? Not in this case.
What we did was have a licensed A/C contractor check the system out throughly and give us an estimate for repairs and in the case of one of the units replacement. We then submitted the estimates, an addendum requesting credit for the repairs, and a notice of cancellation via the Buyer Inspection Notice (BINSR). We expected the bank to stand behind the As Is addendum signed by the buyer and refuse to pay for the repairs which would have been fine. My client would get their full earnest deposit back and we would then begin the search for another home.
The banks first response was to ask for more time to review the estimate and make their decision, which the buyer granted. Our thinking was “hey, if they didn’t say no right off the bat maybe they will step up and make a concession”. As you may have already guessed the bank agreed to credit the buyer for the repairs; at a cost of $6,000, no less. It appears the bank wanted to sell the house rather then put it back on the market and start the selling process all over again. Not to mention the fact that the next buyer might find the same problem and cancel to deal as well. It just goes to show that even if they say sold “As Is” it doesn’t mean they wont fix things to the buyer’s satisfaction.
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