I recently sold a Bank owned foreclosure property.
It was one of those that have their own many page addendum to the contract which was longer than the contract. It had the typical clause of $100 a day charge to the buyer if the contract went past the original closing date. It also had a clause stating that the seller can cancel the contract at any time for any reason and the buyer would get their earnest money back. I don’t like this clause but they wouldn’t remove it, it puts the buyer at risk of spending money on inspections and appraisals and then having them seller’s turn around and cancel the contract without reimbursing the buyer’s for these costs.
It was a good deal to the buyer was willing to take a chance. We went through and had inspection and found a lot of things wrong, the seller’s addendum also had an “as is” clause, once again the buyer was willing to carry on. Next came the appraisal, this is where things started to get a little sticky. The appraiser called for a new roof, and a few of the minor repairs. The listing agent took care of the minor repairs, the seller wasn’t going to put a new roof on the house.
The listing agent and I came to an agreement with buyer’s consent, that the buyer would pay for a new roof, and the seller was even willing to reduce the purchase price by the costs of the roof. The only problem now was the clause that the seller can cancel any time, we tried to get them to take that clause of the contract at this point to protect the buyer’s investment of the cost of a new roof. They wouldn’t do it. The listing agent said the seller’s lawyers would not let them delete that clause from contract. We were now at an impasse.
After a few days the seller finally agreed to pay for a new roof. This was now early December and we were fast approaching the closing date. The seller’s agreed to extend the closing at no cost to the buyer. Since the weather was pretty crummy in December and roofing company couldn’t get their crew out there until January, we got another no cost extension.
The good news is the finally closed on the home, it had a new roof and no penalties to the buyer.
Foreclosures aren’t always easy, but they can work out, and they can be a great deal.