Reo Without Inspection
If I am buying a REO property and they are selling AS-IS, do I have any out if my inspection turns something bad up? My agent wrote in a inspection clause that says its for my information only. If they accept my offer, I have no out. Is this a bad idea?
It sounds like your agent just wants his commission. By specifically stating its just for your information he is screwing you out of an potential out. I always write in that offer is subject to a favorable walk through and/or home inspection. On some of my deals I walk through, on others I order a full inspection. Either way, I retain the right to cancel if the results of either are unsatisfactory. A lot of the times I make offers without viewing the inside of the home. The favorable walkthrough clause works well. That way if there is something as minor as a hole in the sheetrock I can cancel. In any event, I would fire your agent. It sounds like he is not protecting your best interests.
ALWAYS ALWAYS ALWAYS have an inspection clause that give you a way out! End of story.
(And make the inspection deadline as close to closing as possible.)
I agree with the other posters. You are being put in a very bad position here.
To make the bid more attractive keep the inspection period short, I always use 10 days and have had no problems. The bank wants the property sold, not tied up under a contract that can be backed out of, so if you ask for too long of an inspection time they may get nervous. Some banks refuse bids that include an inspection contingency, in that case you need to do your inspections before bidding. I've never bought under those circumstances, makes me think there is something there they don't want to give me the time to find. In reality they are probably just trying to avoid bids from people who bid on anything and everything with a bunch of contingencies and no real intent to buy.
"My agent wrote in a inspection clause that says its for my information only. If they accept my offer, I have no out. Is this a bad idea?"
No, that is how it works, welcome to the world of REOs.
The bottom line is you can write any clause you want and be as big and bad as you wanna be as stated by some of the wrong answers here, but all you are doing is wasting your time. Anybody who has actually purchased an REO knows that you will be puchasing it on the banks contract not yours. They will be supplying you with an addendum and whatever you submit to them prior to that addendum will be crumpled up and tossed in the trash. If you don't want to do it by their addendum you won't be buying the property.
Ask for a copy of the addendum before you submit your offer if you like. But once you've seen one, you've seen them all. The differences will be subtle, but the bottom line is the bank will be reducing their risks and making you take on all the risk they can think of.
AS IS means AS IS. You are an investor not a timid 99 year old woman trying to buy a house to retire in. You are a professional in the eyes of the bank and will be asked to conduct business like one. Expect to take 100% of the risk so do your homework first, pull up your short pants and screw up your courage, then make the offer.
Dealing with REOs you are dealing with a big faceless company that sells every REO eventually, they are not impressed by anything you do or are intimidated by any of the parlor tricks investors try on mr and mrs homeowner.
yes thats exactly what my agent told me. she said that the bank expects you to do some homework before you make an offer. I am having someone come in and look at it first. It wont cost me much and could save me alot of money in the future. I have mad alot of offers on REOs and am starting to see that they want no fluff buyers. You gotta learn to play their game. Thanks!!