BiggerPockets

I am close to buying an REO property that is close to closing. I did a recent walk through and discovered that someone removed the dishwasher and damaged the cover of an in wall A/C unit. It didn't appear to be a forced entry , but who knows who has access. Do banks typically change the locks on the properties once homeowner loses it? I doubt it right?

Everything else seemed ok, property has been on the market for a long time 5months or so, but this theft was recent.

Is the bank required to give a credit for the dishwasher and damage? Property is sold "as is" of course (it is a Freddie Mac property) but it was not in THIS condition when I made the offer.

I am assuming banks have insurance on these properties, but I do not know what this insurance covers.

I told agent about this and she said shes going to look into it, she said a guy found a dead body in one of their REOs recently.

Have other people had similar things happen?

Yeah I am wondering...now the agent said she notified the asset manager about it. In the MLS listing details it does state "dishwasher"

I don't need to close for another 10 days so maybe I will wait it out and see.

Yeah you are right probably was pretty nasty. I guess I just can't get my mind around the idea of someone going into a place and removing a used dishwasher , I guess I am just thinking about the principle of the thing , I guess we'll see if there is any credit given. I doubt they listed it in the contract...all the documentation was literally like 100 or more pages! Insane when everything is basically "AS IS ..we are not responsible for ANYTHING!" Thanks

In-wall AC and under-counter dishwasher become part of the real estate in some areas, since they are attached to the real property and removal would have safety issues (wiring under dishwasher exposed). Built-in refrigerators in high-end properties also fit this bill.

There is nothing lost by trying to get a price adjustment or repair credit of some sort - at most you lose the time and the effort in trying.

Locks do usually get changed. But some weird things also happen. I was in one REO a few months back where apparently the previous owner left a key in the mailbox; turns out that key functioned to open the dead-bolt lock on the backdoor, but no other locks (not even the backdoor doorknob lock). And on Memorial Day I was in another REO that needed no lockbox combo to get in - none of the locks on either the front door or back door were able to engage into the door frame!

Here in NJ a standard contract will contain a clause (can't remember the term) that states that the bank is not responsible for any damage done to the property between the signing of the contracts and the closing. Thus, we usually secure the property pretty well AND change the locks.

I wouldn't make an issue of it at all and would instead secure the property so that no more damage is done. Your job is to establish a relationship with the listing agent so that you can do more deals. You don't want to be a pain in the a$$ over what you see as "principle" and the bank sees as a minor issue being overblown.

My first concern would be securing the house after I bought it. Replacing materials, tools, or staging furniture can be very expensive.

I've got a similar concern. I put an offer in today on a REO that had some very nice appliances (stainless refrig/stove and new washer/dryer) as well as a new A/C unit. My offer price was based on the property having these nicer appliances and new A/C.

It's VERY common in this area for the A/C units to get stolen and not at all uncommon for the appliances to be stolen as well.

Before even accepting my initial offer, the listing agent told me I need to sign the addendum which states what Ibrahim said. It also says they will not offer credit or replacement of any such items if deemed missing, damaged or non-operational at time of closing.

If something did happen before closing, I could back out of the deal, but would surely lose my earnest deposit.

What I did was strike-out "missing" and "non-operational" from the addendum, but my agent doubts they will accept my offer like this.

I could try lowering my bid, but would not expect them to take the offer at much of a lower price due to heavy competition.