Expert: Dick Dennis - 1/3/2011

Question
Hi Dick
Thank you in advance for your expertise. In August my husband and I found a 4 br 3 bath foreclosure we were interested in. It was and is bank owned. The bank required that you be pre-approved by them whether or not you were going to use their financial services. We had been pre-approved by our bank, but when time to make an offer on the house their bank courted us with an FHA loan based on that and the market value of a 4 br house and the fact we were in a bid war we made our offer and won. As we have near perfect credit all was well until the underwriter found the septic only to be rated for a 3 br. We proposed decreasing the price of the house by a new septic to bring it up to code for a four bedroom. It turns out due to tennessees crazy laws we will never be able to install a convential septic for 4 br, not enough land. The health department says mound system possibility but just soil sample and engineering for that runs $1200. We proposed they reduce the sale price by the square footage of the br that cannot legally be counted as a br $16,000. They said they must have a quote for a septic system replacement cost which no one will give us without the soil samples and engineering and can't quote on conventional because can't be done. Any other way to negotiate this? We want the house but are about  ready to walk away

Answer
According to government requirements, Jena, it is required that you have a licensed real estate agent handle this purchase for you. Therefore, if you do not buy that property, the agent who was involved in purchasing the property for you will not be paid. Therefore, I suggest you have that agent work on this since that agent is supposed to know the Tennessee regulations.

As you may know, banks are run by and populated by idiots. They wouldn't know what is best for them if God himself advised them. They will have to be forced through a real estate attorney to do what is best for them. Very simply, Jena, based on your information, there is no way that house will ever sell if they do not negotiate to your level.

If you really do want that house, I recommend you find that real estate attorney and have the real estate agent share in the cost of that attorney. Otherwise, simply walk away and go find another house. The agent most likely will work like the devil to get you your house. I do wish you well.

Dick Dennis
dixiedee13@aol.com