Real dilemma estate
March 26, 2008 11:56 AM Subscribe
Real Estate question - When looking to buy a "short sell", is it normal to have a contract sent to you that is not pending inspection?
We have a bid in, and our lawyer is telling us to get an inspection before we sign the contract (which we haven't seen yet). But our real estate agent says we can't get a binder on the place (so they won't show it to anyone else while we're negotiating) and is telling us to have the lawyer insert a "pending inspection" clause in the contract. Our concern is that we get a $600 inspection and then lose the place anyway. I'm used to thinking that signing a contract would be pending inspection, but that doesn't seem to be the case here.
We have a bid in, and our lawyer is telling us to get an inspection before we sign the contract (which we haven't seen yet). But our real estate agent says we can't get a binder on the place (so they won't show it to anyone else while we're negotiating) and is telling us to have the lawyer insert a "pending inspection" clause in the contract. Our concern is that we get a $600 inspection and then lose the place anyway. I'm used to thinking that signing a contract would be pending inspection, but that doesn't seem to be the case here.
Response by poster: Only problem is, the lawyer is balking at the suggestion to insert it. Not sure why.
posted by hellbient at 12:24 PM on March 26, 2008
posted by hellbient at 12:24 PM on March 26, 2008
why not get an inspection asap then?
posted by Salvatorparadise at 12:25 PM on March 26, 2008
posted by Salvatorparadise at 12:25 PM on March 26, 2008
Response by poster: Well, we plan on it, but an inspection summary takes awhile to get back, and then the lawyer has to review it. By the time we get around to signing, someone could have easily swooped in and grabbed it or made a higher bid. That's the thing about putting a bid in - once there's a bid on the place, the realtors use that to try and get higher bids.
posted by hellbient at 12:42 PM on March 26, 2008
posted by hellbient at 12:42 PM on March 26, 2008
During short sales you are dealing with the bank even though there is a seller who hopes you pay enough for the bank to accept. The banks are stupid typically and don't want contingencies on the offers they look at. I think they are thinking "this guy is getting a good deal, so if he wants to inspect it, he should do that before his offer".
Also you'll find that if you FIND anything in the inspection, they will say "too bad, as-is, we won't fix it". So it's good to KNOW what's wrong but you most likely won't be able to negotiate with what's wrong.
The banks aren't like a normal seller where you say "$100k, contingent on inspection" then later "ok $95k because the furnance is bad". The bank just wants to hear the $95k and will either take it or won't.
I'm an agent, and what I would do in the name of keeping you happy is insert it in the offer but explain to you they may decline the offer based on that stipulation.
Your attorney should explain WHY he doesn't want to. Why do you have two people trying to represent you? Nothing wrong with using an atty but then why use an agent?
So if I was your agent I'd recommend an inspection ASAP before you sign an offer/contract. If you don't think you want to spend the $600, you must think there is something wrong that's not built into your bid so you should change your bid or just walk away.
posted by thilmony at 12:44 PM on March 26, 2008
Also you'll find that if you FIND anything in the inspection, they will say "too bad, as-is, we won't fix it". So it's good to KNOW what's wrong but you most likely won't be able to negotiate with what's wrong.
The banks aren't like a normal seller where you say "$100k, contingent on inspection" then later "ok $95k because the furnance is bad". The bank just wants to hear the $95k and will either take it or won't.
I'm an agent, and what I would do in the name of keeping you happy is insert it in the offer but explain to you they may decline the offer based on that stipulation.
Your attorney should explain WHY he doesn't want to. Why do you have two people trying to represent you? Nothing wrong with using an atty but then why use an agent?
So if I was your agent I'd recommend an inspection ASAP before you sign an offer/contract. If you don't think you want to spend the $600, you must think there is something wrong that's not built into your bid so you should change your bid or just walk away.
posted by thilmony at 12:44 PM on March 26, 2008
Should have previewed... the inspectors I work with typically can print the report on site and you should review it more than an atty... if you can't understand the inspection report without an atty, jeez I dunno.... It's just a report, not a legal document or contract. You are not agreeing to anything so what kind of blessing will the atty give? "yes, this is an inspection report"?
posted by thilmony at 12:46 PM on March 26, 2008
posted by thilmony at 12:46 PM on March 26, 2008
Response by poster: Thanks thilmony. I had a feeling that's how it worked, although I thought in a short sell the bank wasn't yet involved. So the bank's "as-is" attitude makes sense in that light. We have an inspection set for tomorrow. I guess we'll skip the clause, because if the inspection goes well, we will just sign. Thanks!
On preview - yes, you're right about the inspection (vs. atty). The inspector we have is excellent and we'll be there for the inspection, so we'll probably know by tomorrow morning if we want the place or not.
posted by hellbient at 1:06 PM on March 26, 2008
On preview - yes, you're right about the inspection (vs. atty). The inspector we have is excellent and we'll be there for the inspection, so we'll probably know by tomorrow morning if we want the place or not.
posted by hellbient at 1:06 PM on March 26, 2008
A good inspector will tell you on the spot any major defects in the house except possibly Radon problems (and who seriously really cares if the air in your foundation is going to kill you?). The report is usually only really necessary if you are going to further negotiate based on the results of the inspection, or want an excuse to pull out. I have twice pulled out of deals to buy a house based on the inspection, but I have never tried to buy a "short sale" - I don't think it should make any difference. Unless the house is being sold "as-is" - in which case an inspection is meaningless. Frankly, from what you have said, I personally would probably already walk away from the deal, because I don't want anyone telling me I can't put an inspection contingency in the deal in the first place.
posted by thomas144 at 1:07 PM on March 26, 2008
posted by thomas144 at 1:07 PM on March 26, 2008
Response by poster: Unless the house is being sold "as-is" - in which case an inspection is meaningless.
Not if there's asbestos in the walls, termites in the floors and the heating system doesn't work. The inspection is so we know what we're getting into.
The idea is that we'd be getting it cheaper and therefore can put some of the money we saved (ahem) into the fixing up.
Nothing wrong with using an atty but then why use an agent?
The agent showed us the place, the atty is the one doing all the paperwork. Surely as an agent you're used to buyers having attorneys?
Because the agent is familiar with the process, we were just asking her advice on what to do next, even though she's not really representing us in that way.
posted by hellbient at 1:20 PM on March 26, 2008
Not if there's asbestos in the walls, termites in the floors and the heating system doesn't work. The inspection is so we know what we're getting into.
The idea is that we'd be getting it cheaper and therefore can put some of the money we saved (ahem) into the fixing up.
Nothing wrong with using an atty but then why use an agent?
The agent showed us the place, the atty is the one doing all the paperwork. Surely as an agent you're used to buyers having attorneys?
Because the agent is familiar with the process, we were just asking her advice on what to do next, even though she's not really representing us in that way.
posted by hellbient at 1:20 PM on March 26, 2008
Not that it can't happen but I've never had an atty involved in a buyer's side. When they've been involved on the seller's side they usually just give a yes or no to paperwork, as I write the offer and contracts. I'm in Minnesota so this could vary state to state.
posted by thilmony at 1:41 PM on March 26, 2008
posted by thilmony at 1:41 PM on March 26, 2008
Response by poster: Huh. I'm in NY, which could very well make the difference.
; )
posted by hellbient at 1:43 PM on March 26, 2008
; )
posted by hellbient at 1:43 PM on March 26, 2008
This thread is closed to new comments.
posted by Salvatorparadise at 12:06 PM on March 26, 2008