Expert: Steele V. Propp - 12/21/2008

Question
I placed an offer on a foreclosed home. A week later they countered my offer
with a few things. First the home has subterranean termites, fungus and
other minor issues. Seller is telling me that they will not fix the termite issues.
And i am to buy the home "AS IS". Is that legal? How can they sell a home
with issues such as Termites and Fungus? Second they  want me to sign a
seller addendum, my
realtor is requesting to know what is on the
addendums but she continues to get push back. As a buyer am I allowed to
know what is
on that addendum? Second they gave me a date as to when they want to close escrow, if we don't close by that date I'm suppose to pay
$50 a day. How can they give me a date to close escrow when the home
has those issues
that they will not fix? If anyone has any advise
it will be greatly appreciated. ~unsure what
home buyers rights are~

Answer
It appears that your agent is not familiar with buying bank owned properties or he/she would have counseled you on these types of situations ahead of time.

First, bank owned homes are sold "as is".  Perfectly legal.  And usually there is a substantial discount to make up for imperfections or problems.  Your offer should reflect what the property is worth, termites and all.  In other words, you should feel you got a good enough deal to take care of the problems yourself later.

Seller addendum is also normal operating procedure.  It will reflect your agreed price and closing date as well as typically restating the property is sold as is, you have a right of inspection, and all the other terms and conditions the industry has learned to place in the contract.  Understand you can not change any of the addendum or you void your offer.

Of course, if you don't like the addendum, don't go through with the offer.

As for the per day charge (also known as "per diem") for closing late, again normal.  Just as a personal note, all the banks I work with charge $100 a day.  $50 would seem like a deal to my buyer clients:>)  But you need to feel you can close within the timeframe.

Basically, you need to be satisfied with the property in it's present condition and the price you have negotiated up front.  The bank has never lived there.  None of them has ever set foot in it.  So they sell the houses "as is".  Not trying to hide anything.  Your offer needs to reflect this.  A foreclosed house by definition is an imperfect house.  Not to be mean but if one is looking for houses in good condition, foreclosures are not usually the route to go.

I understand your feelings in this.  You were not prepared with what to expect.  So this looks odd and probably unfair.  But it is normal operating procedure for this type of sale.  Foreclosures are done differently.

If you have other questions feel free to post a follow up or email me direct at my address below.

Good luck.

Steele V. Propp
Foreclosure Specialist
Schatz Real Estate Group

steelep@aol.com
http://www.MinnesotaForeclosureNetwork.com