REO Buyers, Traditional Buyers
June 30, 2009
One of the challenges in today's residential real estate market is the contingency on the right of the buyer to do inspections. In all the standard California Association of Realtors' purchase agreement forms, buyers are purchasing a property in the condition that exists on the date the offer is accepted - subject to the buyer's inspection rights. This right to do inspections is also a part of a bank's special purchase agreement, but the banks are very clear that the property is being sold "as-is" and that the bank will not do repairs.
What I have found remarkable is that buyers of REO property accept that the bank will not be repairing any discrepancies that may be found. It is always possible to ask the bank to correct the most egregious problems. Sometimes the banks will give the buyer a credit, but most of the time they will not - probably in the belief that the property's selling price took the condition into consideration.
Then you have the buyers of what have become known as "standard" or "traditional" sales. These are properties being offered for sale by sellers who are not in foreclosure, not in financial distress, but are selling due to personal reasons such as job transfers, and down-sizing or up-sizing. In these cases, buyers seem to have an expectation that the seller should fix every discrepancy cited by an inspector. Obviously, it is in the seller's best interest to fix items that could be health and safety issues. The difference between what an REO buyer will accept and what a traditional buyer will accept is remarkable. Sellers in this market environment need to expect to do repairs as buyers will exercise the right to cancel the purchase agreement if a requested repair will not be done.
Bottom line. If you are a traditional seller, it might be a useful strategy to have your home inspected prior to offering it for sale. In this way you would know what may become a sticking point in a sales transaction and can often make the repair before it becomes a major deterrent for a buyer.
One of the challenges in today's residential real estate market is the contingency on the right of the buyer to do inspections. In all the standard California Association of Realtors' purchase agreement forms, buyers are purchasing a property in the condition that exists on the date the offer is accepted - subject to the buyer's inspection rights. This right to do inspections is also a part of a bank's special purchase agreement, but the banks are very clear that the property is being sold "as-is" and that the bank will not do repairs.
What I have found remarkable is that buyers of REO property accept that the bank will not be repairing any discrepancies that may be found. It is always possible to ask the bank to correct the most egregious problems. Sometimes the banks will give the buyer a credit, but most of the time they will not - probably in the belief that the property's selling price took the condition into consideration.
Then you have the buyers of what have become known as "standard" or "traditional" sales. These are properties being offered for sale by sellers who are not in foreclosure, not in financial distress, but are selling due to personal reasons such as job transfers, and down-sizing or up-sizing. In these cases, buyers seem to have an expectation that the seller should fix every discrepancy cited by an inspector. Obviously, it is in the seller's best interest to fix items that could be health and safety issues. The difference between what an REO buyer will accept and what a traditional buyer will accept is remarkable. Sellers in this market environment need to expect to do repairs as buyers will exercise the right to cancel the purchase agreement if a requested repair will not be done.
Bottom line. If you are a traditional seller, it might be a useful strategy to have your home inspected prior to offering it for sale. In this way you would know what may become a sticking point in a sales transaction and can often make the repair before it becomes a major deterrent for a buyer.
posted by shirley harry at 8:07 AM
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