Has anyone had this situation? I am representing a buyer on an offer submitted on a bank foreclosure. The bank just countered to remove our 3 day inspection period completely. What concerns me is the building is built by a builder who has had issues with Chinese Drywall and although there have not been any reports of Chinese Drywall so far, the buyer wants an inspection to determine this for his own peace of mind.

Anyone have any advise.

I have had this happen. The listing office told me that the bank always wants 0 days for inspection because they are selling "as is." Doesn't make sense to me since the buyer is still entitled to do inspections. She said if the house does not satisfy the buyer, they can still get out through the loan contingency stating that the buyer cannot get the loan because the house has this or that problem.

The buyer was not happy with this arrangement and told the bank to take a hike.

Counter back to keep the 3 day inspection or reject the offer.

We did counter back at 3 days when we were told by the listing agent 10 wouldn't do. This is a CASH offer, I was told the highest offer so far and the buyers are willing to close in 2 weeks or less. The agent is on the other side of the state and doesn't have anyone servicing this area so therefore has no idea who the utility companies are never mind get them turned on. I am doing all the legwork on getting condo docs, researching utilities etc. which is not my responsiblity as the buyers agent. These things should be readily supplied to me for my buyer. Also, I don't have the counter in writing just a verbal. I asked for the counter in writing so my buyers could accept. We plan on doing the inspection anyway during the 3 day right of recission of condo docs to give my buyers some peace of mind but battling to get the utilities turned on. When the bank counters an offer doesn't the listing agent need to put it in writing and pass along as any other sale? Why are all the rules changing because it's a foreclosure and they have multiple offers..??? An if we are highest and best can the agent decide to pass us up because we insist on getting the counter in writing and the condo docs supplied?

Many of the bank owns here do verbal counters. The bank then issues addendums based on the counters. There is no contract though until the addendums are signed and returned. I would not start the inspections until I had a contract.

Utilities can get tricky. I've had buyers turn the utilities on in there name for inspections, I've had the listing agent turn them on. The water is always the fight as most of the time the bill is not paid until closing, and the water department will not turn it on until it is closed. The banks are unwilling to dewinterize the property unless the seller pays up front to have it rewinterized.

The winning contract will be chosen by the seller. A higher offer with more demands (inspection period, etc) could potentially loose. Price is nice, but the likelyhood of closing is better, even at a lower price.

One trick we've used in this type of situation, is when the bank says no to a timeframe for inspections, we counter back with two offers, one being the original, and the other at a lower price with no time for inspections. This works surprisingly well.

As an aside, it amazing to me how clueless the banks are when it comes to selling their property. Their policies actually make the properties less attractive to buy, and therefore worth less. I picture some guys sitting in a legal department coming up with rules based on problems they've had. They make new rules and think they are heroes, but have no clue the effect that the rules have in the real world.

We are starting to see similar things in the short sale world. Wells Fargo has an addendum that says in effect "We want to [censored] off real estate brokers, and we want to devalue all potential short sale properties".

Not too bright it seems to me. Because of an occasional property that doesn't close they want to hurt themselves on all of them!

Chris

Well, I'm still waiting for anything in writing from the sellers agent.. 2 emails and a phone call later. Nothing. Still do not have condo docs either.. but hey.. I really don't have a contract do I??? So where does that leave me and the buyer??? Who knows??? This is getting ridiculous.. I don't know how we are supposed to represent the buyer under such vague circumstances. This puts the buyers agent in a precarious position. Eventually, the agents are going to get fed up with this crap and refuse to work with the banks completely.

Thanks for your advise Chris... I will put that one in my back pocket..

REODAYTON; I would do the inspection after the addendum but since this is a CASH offer with a quick close we only have the 3 day condo right of recission to do the inspection since the bank wants the buyer to waive the inspection completely. I've already checked with the local utility company on getting the electric on temp. in my buyers name and the water should be on but just turned off at the main since it's a condo complex. So all is good to go. I don't understand why the listing agent can't write the banks counter request in a formal counter for the buyer to sign.. this is standard practice... Then I would just need the condo docs to proceed.

I understand your frustration, I really do as a listing agent of REO and as a Buyers Agent of REOs.

Sometimes as the Buyers agent you do have to take charge. Write up the counter and insist that it gets forwarded for the signature. As a listing agent thats all we do. Depending on the bank, it has to go to a committee and be voted on, it may need manager approval, it may need client approval.

Standard practice here is different than there, then you are dealing with AMs who are familair with standard practice there and not here blah blah blah.

Agents that sick of dealing with the banks or do not understand why the banks are so inefficient and refuse to deal with them, that would be a problem in my area. You really would not show many homes.

Got a responce from the assistant that the bank rejected our offer. Hmmm. First they countered to reduce the 10 day to a 3 day inspection which I did, then the agent said they wanted to waive the inspection entirely. So what is it?? I've been trying to get "something" tanigible from the agent and his responce was that he will go to the next offer...This is after I researched the property.. gave him all the utility contact info and where to download the docs... In essence I did his job.. and now we get the "rejection" in writing.. why couldn't we get the counter in an email....so I have something other than a vague phone conversation..? My broker says to call the bank and follow up to make sure my offer was ever received. This is all games.

Just my opinion. I believe your offer was presented. It was a highest and best offer, you (your client) had to many demands. The demands equate to an opportunity in selling the property so they chose an offer without the consessions.

Try to track down the AM, he will likely refer you to the LA. Your tale is not a tale I don't here often. I sympathize but, thats the REO business, good or bad. Its not a "game" just a different way of playing the game.

Actually this has become more and more popular.

Especially where the buyer is asking the seller to come of their list price buy a lot and or the seller already has from original list date. These sellers want as few contingencies as possible.
What I do in that situation as the listing agent is recommend to both the bank and the selling agent to go ahead and do their inspection prior to signing the contract/addendums and that has worked.

And million$agent in answer to your question. These banks don’t typically give a formal written counter till all the terms have been negotiated. So the most you usually can get is an email or fax. I prefer email. Let me explain a little here with forecloses. 99% of the time to present an offer I am now doing these on line. I fill out a form kind of like a spreadsheet and hit submit. I then get an email back telling me there is a counter there. I then go online and read the spreadsheet. Once all the terms have been negotiated I then hit buyer accepts and then I get an email that the addendums are ready. I then go in and download then and send them off to the selling agent.

Chris SLM sending two offers to the listing agent won’t work because the listing agent can only input one and now you just gave him the choice of which one to input. And or what usually happens is you get a h&b counter and you really don’t know but you are the only one bidding and you are bidding against yourself.

Most of the banks do have the Utilities and electric on for that just might be the listing agent as they are the ones usually required to put on and they just don’t want to put of the deposits. But 90% of the banks do require that of the listing agent. Electric is easy. Utilities can take time as past due needs to be cleared up before that will be turned on. And sometimes we are just waiting on the approval to pay. Condo and HOS docs well that’s were you selling agents can help. It’s not that I don’t want to provide, it’s that can be a nightmare to get from the HOA and or condo association or even finding out who to contact. So in that it’s not doing the listings agents job it’s just helping out.

Its pretty simple to me I would never put my buyer in a contract without having a inspection clause or other way out. I have just seen to many things come up in a inspection where the buyer had to walk away.

Obviously all of us would advise buyers to get an inspection done, albeit at the end of the day it's still up to your buyer. If they want the inspection then you need to advocate for them. Nice thing is with this, is that I typically find the listing agent will be on the same page with you since 90% of their other client's probably allow for an inspection period.

Please remember, and remind your broker, that banks & asset managers are NO DIFFERENT than any other seller! They have signed listing agreements with their brokers and everything.

I know you had a really difficult time dealing with this guy and don't want to jump on you. But this is HUGE no-no, unless it's a last resort, AND you give both the agent & broker fair warning before you attempt to contact a seller.

As you can guess I had a buyer rep contact one of my asset managers. He was not happy. With the buyer rep. Especially since that person had no reason to make a phone call.

why not do your inspections prior to being under contract?

If you've already been told that you're the highest and best offer, you definitely don't have to let the bank know THAT DAY that their counter offer was accepted/rejected. Do your inspections NOW and then decide whether you want to move forward or not...

either way you're paying for inspections whether you buy the house or not..but this way you're keeping your options open to back out by not waiting until you have fully signed paperwork...