Experience on buying an Occupied Bank Owned property on Hubzu

3 Replies

I bid for a Bank owned multi family house on Hubzu and won. The property was tenant occupied and it was cash only. I signed the Purchase and Sale and we were getting ready to close. I found out that the house had a long list of city violations, I was okay with that, it still made it a good deal as I spoke to the city and they were willing to write off a lot of them.  Then all of a sudden I got an email to sign a Hold Harmless Agreement, so just to make sure I decided to snoop and ask neighbors and the lady at the city if they knew of any other litigation. Apparently the tenant had fallen and the bank had offered to settle at $35,000 but the tenants lawyer was fighting for more money. I told this to the bank, but they wouldn't disclose of any pending litgation, they just wanted me to sign and take over everything violations and any pending litigation. At this point I decided to pull out of the deal with this shady bank. Mind you this house has been under agreement 3 times before me. It is right back on HUBZU as I type - I guess it will be on the market till they find a sucker. Thought I would share my experience.

Unless I’m missing something.....the suit would be against the Owner At The Time Of The Incident. It wouldn’t be your problem....you are buying the Property and any claim would be against theOwner at that time.

I would suggest take the contract and talk to a real estate attorney. It is possible they are making you inherit “any claims or disputes” . So be careful. Thie fact this listing had contracts getting cancelled 3 times doesn’t bode well.

Originally posted by @Wayne Brooks :

Unless I’m missing something.....the suit would be against the Owner At The Time Of The Incident. It wouldn’t be your problem....you are buying the Property and any claim would be against theOwner at that time.

 That's what I thought too.  I know that is what a lot of people think  too, so that is why I decided to post my experience so it helps someone out.  A hold harmless agreement when you purchase an "as is " property means exactly that you purchase the house , all its violations and any undisclosed litigation. 

My Real Estate lawyer countered with the owner( Bank) to also sign a Hold Harmless agreement  that would protect me from litigation I was willing to pay the violations, as well as take care of evicting the tenant as part of the deal. The bank declined to negotiate and the whole deal fell through and the house is back on the market on Hubzu.