I am trying to purchase an REO property, it is a Fannie Mae Homepath property.

The listing broker dictates that we use their special form, which is a standard Florida FAR/BAR AS-IS contract but with certain lines already filled in. The standard no warranty nothing included no knowledge of any condition of anything, which does not bother me.

However, on the riders/addenda/special clauses part of the contract is says:
"The seller's Addendum supersedes this Sale and Purchase Contract."

and my attorney advised me to cross it out because we have not seen such an addendum and have no idea what's on it. So how could anyone sign a contract that says anything in this contract would be null and void by something you haven't seen yet?

The listing broker says this addendum with it's terms will come back later from the bank if they decide to accept my offer and you will then have a chance to review and sign it or walk away with your deposit back.

My attorney says fine, then cross out this line and when the addendum comes back, have them add in that line to the contract then, but not now, signing the contract now without the addendum referenced in the contract is unacceptable. The listing broker says if you cross out this line the bank will not even look at the contract offer, take it or leave it. I do have an agent representing me and he said he has not seen such a addendum before, but why pay for an attorney if you are not going to listen to him.

So I think I am stuck with this technical procedural glitch. Is there anyway to navigate through this?

You will have to fill out the standard contract. If you win the bid, then the addendums will be issued. At that point you are not under contract until you sign the addendums. If you get the addms and don't like what it says, don't sign them and walk away.

First of all "this is not legal advice" I feel it is necessary to tell you that - this is reo listing agent advice. Do you want the house? If so - you are over thinking this. Sign the form - all bank addendums supercede the standard contract - they are asking that you acknowledge the fact that it does - not that you agree with the addendum you haven't seen - get the offer accepted - read the addendum - if you agree sign - if you don't walk. If you are stuck on this - you are about to be overwhelmed by the addendum - I have never - ever met an attorney that likes them - take it to him - get his advice - but I can tell you this - if you want the house - don't get stuck on the language. It is standard - CYA (cover your a*s)- and the bank wrote it so - yep it is in their favor - can you get around it - not if you want the house. Remember two things - you are not in contract until you sign the addendum- you simply have made an offer - and you have the right to do a home inspection and walk if the house is a POS. In my experience - no bank addendum can be changed in anyway - when buyer's and their attorney's start "striking" out language - it gets rejected. Listing agent is not trying to sell you down the river - he is just telling you the truth. Bank's house - bank's rules. Again - so not legal advice.

Actually, the listing broker can send you a blank addendum for you to review. It's not like the FNMA addendum is any secret in the REO world. And, yes, the addendum always supersedes the contract. And, no, you can not change the addendum.

Fannie is evil. I actually fired them as they would change contracts and addendum after the buyer had signed which put me in some pretty bad situations. No wonder they are in such trouble. I would sign anything until I see the addendum, and DON'T put any money into escrow until you have seen ALL of the executed addendums. I agree with your attorney on this one.

Well, we left the addendum clause in, but I added one line at the end that says "Seller shall provide to Buyer the completed seller's Addendum simultaneously with Seller's approval of this Contract. This Contract is not final until Buyer signs the completed seller's Addendum." which is I believe the intent but not explicitly stated in the special clause. I hope that does not cause any problems. One hour after we submitted the offer, my agent came back with the multiple offer notification telling us that there are multiple offers and asking us to either (a) Withdraw our offer (b) revise our offer or (c) Keep the same offer and sign this acknowledgment. I checked to keep the same offer.

At this point, I guess I am waiting for the bank to counter or to accept/decline or they may counter everyone?

This is typical for the REO contracts. Your attorney is right, but banks do not care.They will not change the contract especially for you,moreover the asset manger or the listing agent are not the persons that are authorized to change the contract. If you like the house sign the contract. Not legal advice.

Their counter was highest and best. Generally they will accept or counter the offer in their best interest or reject all. If your offer is the best, so be it, if another offer is more attractive, that will be the offer negotiated.

S.O.P.

I'm more concerned that your agent has never seen this type of addendum before. They clearly don't deal with REOs as an agent on either side and never asked anyone else about it.

Right on. What Victor said.

As an REO agent and a buyer of REO properties, I am astounded at some of the language in these REO addendums. I am waiting for one to say, that the bank will have the right access the buyers bank account for any reason up to 14 days after closing.

I went to the wall with BOA in the last 2 weeks as a buyer. Closing with my atty. as my closing agent (and getting a title policy from his provider) is very traditional and extremely lawful in VA. BOA has a nasty addendum nixing that, indicating seller will provide a closing attorney, or title company, and also will provide a title policy. I changed their addendum and BOA signed it.

As a listing agent I will tell you that NEVER happens. I was suprised. Only thing I can say is go with your gut and trust YOUR agent and YOUR atty. to give you good advice.

Does anyone else have to include "Pursuant to section 28 of the real estate purchase addendum, this contract is subject to all terms set forth in the real estate purchase addendum". Im tired of typing that out. Selling agents can never remember to include that on the state contract.

Yes it is typical for addendums to supersede the state contract. It's part of buying an reo.

The contract we were dictated to use by the listing agent says "The Seller's Addendum supersedes this Sale and Purchase Contract. Full earnest money deposit shall be held by Seller's Closing agent, The deposit shall be placed within escrow agent within 24 hours of seller's acceptance! All earnest money deposits must be in the form of a cashier's check, money order or check from broker's escrow account. NO EXCEPTIONS!!! No other parties in this transaction may require spousal signature, failure of buyer's spouse to sign or execute documents is not a contingency of this contract."

To which I added two lines.
"Seller shall provide to Buyer the completed seller's Addendum simultaneously with Seller's approval of this Contract. This Contract is not final until Buyer signs the completed seller's Addendum."

Now the waiting game.

I put down till June 25 5pm as the acceptance deadline. My agent says the bank is going to do whatever they want to do, they might come back in a few days or they may stay silent for weeks, they are not going to pay any attention to my acceptance deadline.

So, if on June 26 they decided that my offer is worth countering or accepting, will they say oh the deadline is passed this contract is no good, let's look at another one that is still alive?

You do realize that you are banging your head against the proverbial wall, right?

JB - again - you are over thinking this. Banks do not care about what your deadline is on your offer. If you are highest and best - you win. The listing agent will come back and tell you if you are highest and best - and if you are send you the addendum. As far as the language you added - they'll ignore that too. The only thing that matters and starts timelines ticking is the seller's signature on the bank addendum. You will get the addendum first - then the listing agent sends it to them for signature. Upon delivery of seller's signatures to you - at least here - you are in contract and have to spit up the earn $. And I agree with NtxB - doesn't your forehead hurt?