Trying to Buy this house?

Question

I made an offer on an REO house, the selling agent we've been working with came back and said there's another offer and we're going to do a better and best. Now, I don't know for sure if there really is another offer, for many reasons I won't go into.

Okay, so we made a second offer. The mortgage broker said it was a good offer and the agent acted as though it was good too, so i feel confident. The mortgage person said we should know in a couple of days.

Okay, our offer has one contingency, we want the furnace to be put in. When I mentioned this in my first question, everyone tore it down and flooded me with negativity. Well, it is a house code violation and the bank knows they won't get their money, so it IS fair to ask for this.

Anyways, the bank says they will put the furnace in if we can prove that our funds will be available. So the mortgage company wrote a letter to the bank stating that if the bank puts the furnace in before or one day after the closing date, we will recieve funding.

Okay, so my question finally is...how does this sound? Have you been in this situation? I'm fairly confident this is going to happen and we want it very badly. It's so stressful but its been fun too.

Also, we did this yesterday, I'm thinking that if we don't hear from the agent by tomorrow afternoon, we're going to contact her and get some information. This couldn't hurt, right? Either she will know or she won't. So, please don't talk to me about the bank taking their time, they've been pretty quick so far.

Please don't flood me with a bunch of negativity again either. I don't want to sound rude, but I would really just like some honest feedback about what you think.

Thanks for answering :)

Answer 1

I'm not sure why you made a second offer.  Was the first one rejected?  Do you have a real estate agent yourself?  You said it was an REO house?  I don't know what you mean.  Did you put a time frame on your offer?  There's no furnace?  Is there some other type of heat.  I don't have a furnace, but each room has it's own electric heat.  I didn't think I'd like it but winter bills are minuscule, and no gas bill.  I don't mean to be negative, but I think more information is needed to give you any kind of valid opinion.

Answer 2

I’m completely confused about that letter from your mortgage company where the bank is going to install a furnace after you close. What’s in place to enforce that?  As in, if they don’t do this, what leverage do you have to get the bank to follow through on its promise?   what recourse do you have? Normally when you want work done, you can delay closing until it’s completed.  If you’ve closed, I’m not certain you have a leg to stand on.

Once you take possession, you have accepted the house as it is.  You actually have to sign something at closing saying you’re satisfied with the house’s present state. I don’t know how much you’re willing to spend, but if I were you, I’d want an attorney to explain the legal ins & outs of such a scenario to me.

I’m sorry if you find this “negative” but you’ve presented a scenario where I’m concerned you’re going to get screwed.  

Answer 3

Loss mitigation departments and asset management agencies are not unreasonable people, they know that the house has to have a furnace to receive financing, and I don't think that you hurt your offer with that contingency.   Since there seems to be agreement that if you produce a pre-approval for financing that they will replace the furnace, you are in a good position.

Lenders are pretty slow on short sales, but I am finding with REO's, some are really good about getting it done.  If you have been receiving quick responses so far, I suspect you should hear something soon.

By all means, keep in touch with your agent.  

Good luck and sending positive thoughts your way.

Answer 4

On a REO, the bank is not obligated to fix anything wrong with the house. Nor are they obligated to submit a transfer disclosure statement. That's the risk you take with a REO: there could be hidden things that are seriously wrong with the place that could end up costing you a lot more to fix later.

Even though the missing furnace is a code violation, it's not up to the bank to pay to have that fixed. In fact, I'm surprised they agreed to it at all. I would have thought they would come back and either say they'll take x-amount off the purchase price (or credit that back to you at closing), or tell you the home is being sold as-is, take it or leave it.

Welcome to the wonderful world of foreclosures.

Answer 5

By all means make contact with your agent. This is common to stay in constant contact with your agent.

Your agent if he/she is a good agent will make contact with you on a timely basis. When I was an agent I made contact with my clients on a weekly basis and if additional information was found out I made contact with them the same day as the information was found out.

I would tell my clients that I will contact you on Tuesday with any updates good or bad to keep you abreast of anything about your transaction. I also made sure that they understood that if there were any questions to contact my assistant and if my assistant could not answer the question I would prior to 8 PM that evening.

This way there was constant communication between myself and my clients and they always had access to me.

I hope this has been of some use to you, good luck.

"FIGHT ON"