Red flag!?

8 Replies

in a dilemma and in need of some BP community feedback. 

I'm searching for my first investment property and found a duplex that I'm very very interested in listed the low 100k's. I put in an offer 20k below listing to feel out the sellers motivation with contingencies based on an inspection. I received a counter offer today as expected but there was a big caveat. 

In the counter, the buyer demands use of MAR As-Is Addendum option (A). This in essence states that if accepted, the property is sold as is and that an inspection cannot be a condition of the sale. 

This was a huge red flag to me because this isn't a rehab in a war zone that you might expect to see an addendum as such. To me, it feels like the seller has something to hide but I have very little (basically none) experience in real estate so I'm relying on intuition. At the same time, I don't want to pass up on what may be a great investment. BP, what are your thoughts?

Joe 

You could be right. If you're uncomfortable with it, skip the deal. Something else will come along.  

Ask the seller if you can do an inspection prior to putting in an offer.  Maybe they just don't want to be given the runaround by experienced buyers who put a property under contract at a satisfactory price, then try to nickel and dime the seller down to a low price after inspection.

There's a house locally that has been under contract twice in the last month and gone back up for sale.  Now, the seller has a note saying inspections must be done prior to putting in an offer.  Maybe your seller is thinking the same way?  

BTW, was the counteroffer a price you feel comfortable with?  If so, don't abandon the opportunity yet, until you know for sure.

Originally posted by @Randy E. :

Ask the seller if you can do an inspection prior to putting in an offer.  Maybe they just don't want to be given the runaround by experienced buyers who put a property under contract at a satisfactory price, then try to nickel and dime the seller down to a low price after inspection.

There's a house locally that has been under contract twice in the last month and gone back up for sale.  Now, the seller has a note saying inspections must be done prior to putting in an offer.  Maybe your seller is thinking the same way?  

BTW, was the counteroffer a price you feel comfortable with?  If so, don't abandon the opportunity yet, until you know for sure.

 Thanks for your insight Randy. The realtor did in fact say that we could run an inspection prior to making an offer. I personally just don't like the idea of shelling out $XXX on an inspection without a pending contract accepted. 

Originally posted by @Joe Gemma:
Thanks for your insight Randy. The realtor did in fact say that we could run an inspection prior to making an offer. I personally just don't like the idea of shelling out $XXX on an inspection without a pending contract accepted. 

 Joe:

That's the price of admission.  But it is far cheaper than buying a significant problem.

Lots of times we'll walk an "As is, Where Is" property with, or without, our contractor before making an offer and make a decision, but I would not recommend this for your first few properties.

Medium greenapartmenthires 1024x1024Roy N., Louer Louer Ltd. | 1.506.471.4126

thank you guys for the advice.

@Mindy Jensen I am working with an agent and am definitely considering another counter. You're definitely right about asking. Can't hurt. 

@Roy N. Would you say it is common for a buyer to run an inspection prior to an offer?

Originally posted by @Joe Gemma:

thank you guys for the advice.

@Mindy Jensen I am working with an agent and am definitely considering another counter. You're definitely right about asking. Can't hurt. 

@Roy N. Would you say it is common for a buyer to run an inspection prior to an offer?

It's not common, but in such situations it makes sense.   Often you can convince the vendor to allow an inspection after an offer with the understanding that you either close or walk as there will be no further negotiation.  However, that's not really an option at this point ... though, it never hurts to ask.

Medium greenapartmenthires 1024x1024Roy N., Louer Louer Ltd. | 1.506.471.4126

Hi Joe,

Thanks for sharing your situation. If you are getting a 20%+ discount on the property I would not run from an “As Is” clause. The seller may be thinking they are coming down significantly on price and they don't want to be asked to repair any items prior to closing. If you get an inspection and no significant unknown issues are uncovered then it seems like you get the deal you wanted. If the inspection uncovers any items you are not comfortable with then walkaway.

I love duplexes. We only own one and wish we could find more. Better cash flow than our SFHs and higher ROI. Good luck!

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