- This topic has 10 replies, 4 voices, and was last updated 16 years, 7 months ago by
SD Realtor.
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October 17, 2007 at 8:52 PM #10657October 17, 2007 at 9:13 PM #89794
Diego Mamani
Participant1. Yes, such contingencies are still used. But in this case, the bank will certainly not take your offer seriously if you use such a contingency.
2. A good inspector will know what to do. But make sure (1) you don’t go with an inspector recommended by the seller/bank/listing agent, and (2) you pay for the inspection.
Financially speaking, it’d make sense to rent a similar property for 2-3 years, and then (in the future) start making low ball offers. Catching falling knives this early in the down cycle is a sure way to lose money. If prices drop only 10%, you’ll have close to $150K of equity wiped out.
October 17, 2007 at 9:13 PM #89803Participant1. Yes, such contingencies are still used. But in this case, the bank will certainly not take your offer seriously if you use such a contingency.
2. A good inspector will know what to do. But make sure (1) you don’t go with an inspector recommended by the seller/bank/listing agent, and (2) you pay for the inspection.
Financially speaking, it’d make sense to rent a similar property for 2-3 years, and then (in the future) start making low ball offers. Catching falling knives this early in the down cycle is a sure way to lose money. If prices drop only 10%, you’ll have close to $150K of equity wiped out.
October 17, 2007 at 9:26 PM #89796NotCranky
ParticipantRustico AKA realtor boy
1. Are buyer’s making offers with a contingency that buyer’s house must sell first for deal to go through? My sense is that this contingency has fallen out of use in the past 5 yrs.
Nothing wrong with making this contingency. It has been less popular in the boom because sellers could take an offer that didn’t include it because there were so many buyers. The seller always can establish the 72 hour clause so I don’t see why they would refuse your offer on that criteria. It may be difficult in a short sale situation or REO depends on the institution and I don’t have data.
2.The house has been abandoned. Therefore, water, electrical etc. has been turned off. How in the world can a good inspection of the house be made prior to sale…..pool heater, pump, a/c and heating, water heaters, water pressure..etc. Obviously, I would need to make a contingency in the first offer but has anyone had experience with this type of situation?
If you buy from a private party these issues should be accommodated. If you are dealing with a bank they don’t have to and perhaps won’t, you cover any risk with the offer or ask if they will cooperate before you get to deep.
Disclaimer, I am just “realtorboy” practicing. Realtordaddy will be along soon(If he hasn’t posted already).
October 17, 2007 at 9:26 PM #89805ParticipantRustico AKA realtor boy
1. Are buyer’s making offers with a contingency that buyer’s house must sell first for deal to go through? My sense is that this contingency has fallen out of use in the past 5 yrs.
Nothing wrong with making this contingency. It has been less popular in the boom because sellers could take an offer that didn’t include it because there were so many buyers. The seller always can establish the 72 hour clause so I don’t see why they would refuse your offer on that criteria. It may be difficult in a short sale situation or REO depends on the institution and I don’t have data.
2.The house has been abandoned. Therefore, water, electrical etc. has been turned off. How in the world can a good inspection of the house be made prior to sale…..pool heater, pump, a/c and heating, water heaters, water pressure..etc. Obviously, I would need to make a contingency in the first offer but has anyone had experience with this type of situation?
If you buy from a private party these issues should be accommodated. If you are dealing with a bank they don’t have to and perhaps won’t, you cover any risk with the offer or ask if they will cooperate before you get to deep.
Disclaimer, I am just “realtorboy” practicing. Realtordaddy will be along soon(If he hasn’t posted already).
October 17, 2007 at 9:43 PM #89800SD Realtor
ParticipantFencesitter I would recommend you sit down with your realtor or broker to come up with a cohesive strategy of how to deal with this. You mentioned that the home is not yet REO, if that is true is it for sale as a short sale or not? If it is you may want to ask your realtor to call the listing agent so you can get information from the asset manager who the home has been assigned to in loss mitigation to get the skinny on the home. You may want to make an attempt to get an offer in prior to the trustee sale and you may be able to swoop in on it. Of course this would end up as a short sale and that means it will take a few weeks for the lender to consider your offer.
If it is not yet for sale then all of the above is moot.
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What I have seen is, if the home becomes an REO and it gets priced well then it will most likely go pretty fast. You can absolutely try to come in with a contingency of sale for your property, there is no harm in doing so, yet my belief is that again, your success will depend on the pricing/location/desireability of the home.
People can say all they want about the drug home in 4S Ranch but that sucker had several offers and went into escrow immediately. There is another REO in La Costa Valley that has been on the MLS 1 day and already has an offer on it and more will follow…
My point is (the one I keep harping about) is that desireable properties that are priced aggressively are indeed moving… much to the chagrin of posters…(don’t blame the messenger guys)
You do not have to explain yourself for purchasing the home. Sounds like you know what you are doing. Absolutely put in as a condition of purchase in the RPA (purchase agreement) that you will need utilities and water turned on so that you can perform your due diligence. Once the home becomes REO I am pretty sure the bank will turn them on. Even the drug house in 4S had utilities turned on. Yes I was there and visited the home and no I don’t think there were piles of powder or bundles of cash under the floorboards. However I absolutely understand and agree with the reasoning for the sellers to back out of the deal.
Anyways as always, don’t be afraid to write it up with the sales contingency in place but my read is that they will most likely hold out for awhile for a non contingent offer. Especially in this market. Hey you don’t know if you don’t try right? I say go for it.
SD Realtor
October 17, 2007 at 9:43 PM #89809ParticipantFencesitter I would recommend you sit down with your realtor or broker to come up with a cohesive strategy of how to deal with this. You mentioned that the home is not yet REO, if that is true is it for sale as a short sale or not? If it is you may want to ask your realtor to call the listing agent so you can get information from the asset manager who the home has been assigned to in loss mitigation to get the skinny on the home. You may want to make an attempt to get an offer in prior to the trustee sale and you may be able to swoop in on it. Of course this would end up as a short sale and that means it will take a few weeks for the lender to consider your offer.
If it is not yet for sale then all of the above is moot.
*********
What I have seen is, if the home becomes an REO and it gets priced well then it will most likely go pretty fast. You can absolutely try to come in with a contingency of sale for your property, there is no harm in doing so, yet my belief is that again, your success will depend on the pricing/location/desireability of the home.
People can say all they want about the drug home in 4S Ranch but that sucker had several offers and went into escrow immediately. There is another REO in La Costa Valley that has been on the MLS 1 day and already has an offer on it and more will follow…
My point is (the one I keep harping about) is that desireable properties that are priced aggressively are indeed moving… much to the chagrin of posters…(don’t blame the messenger guys)
You do not have to explain yourself for purchasing the home. Sounds like you know what you are doing. Absolutely put in as a condition of purchase in the RPA (purchase agreement) that you will need utilities and water turned on so that you can perform your due diligence. Once the home becomes REO I am pretty sure the bank will turn them on. Even the drug house in 4S had utilities turned on. Yes I was there and visited the home and no I don’t think there were piles of powder or bundles of cash under the floorboards. However I absolutely understand and agree with the reasoning for the sellers to back out of the deal.
Anyways as always, don’t be afraid to write it up with the sales contingency in place but my read is that they will most likely hold out for awhile for a non contingent offer. Especially in this market. Hey you don’t know if you don’t try right? I say go for it.
SD Realtor
October 17, 2007 at 10:21 PM #89814fencesitter123
ParticipantThanks SD Realtor…….yes, it is a short sale
October 17, 2007 at 10:21 PM #89823ParticipantThanks SD Realtor…….yes, it is a short sale
October 17, 2007 at 10:40 PM #89820ParticipantGot it fence… so maybe write up an offer and try to get it while it is being sold short. See if you can get them to bite with the contingency of sale.
SD Realtor
October 17, 2007 at 10:40 PM #89828ParticipantGot it fence… so maybe write up an offer and try to get it while it is being sold short. See if you can get them to bite with the contingency of sale.
SD Realtor
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