The family down the street is selling their home. If you didn’t attend the PTA meeting or go to the church with the family chances are you don’t know this seller. Unfortunately in today’s market we do know the seller. We can bet that the seller of that house is one of the following:
- Bank of America
- Freddie Mac
- Fannie Mae
- Wells Fargo
- Washington Mutual (WaMu)
I’m sure there are countless other banks that are selling Americas housing inventory but these are the major players right now. This, in turn, has created sellers (banks) that do not know the condition of the property you want to purchase. They have no idea that there could be cement hardened in the plumbing or that there was a leak in the roof, etc. This is the major reason why banks are selling their properties “AS IS“. In California they do not have to provide a disclosure of the condition of the property. Why would they, they didn’t live in it?
Banks are selling their properties, “As is” but what does, “as is”, really mean?
- Does it mean that once I make an offer I have to accept the present condition of the house?
- Does it mean that when I take a look at this house I have to sneak around and check everything before I make an offer?
This is what “As is” means:
“It means that you are purchasing this home in it’s present physical condition. The seller (bank) is selling you the house without any warranties or guarantees of its condition whatsoever. The seller (bank) will not repair or improve on anything, period.”
But does this mean that you have to purchase your prospective home blindly? The answer is NO.
Even though you are purchasing a property “As Is” you still need to know what “As is” is. Do you follow me?
This is why you should always elect to do a home inspection especially on a bank owned property where no one knew how the home was cared for and no one knows what happened right before the past owners left the property. They could have done some things that made the property unsafe or could have done damage that wiped out any profit you had calculated into the deal.
Since the banks want a quick escrow you should be prepared to throw out the custom 17 days to complete your inspections and bring it down to 10 days or sooner on your initial offer to the bank. I work with many investors here in Victorville California and the norm on home inspection periods has been 7 days and in some cases the banks have countered with 5 days to complete the home inspection.
You need to ask for this home inspection period so you can find out what the “As is” condition is of the property. Once you are satisfied with the present condition is when you proceed with the purchase. If not, cancel!
Yes, you lose out on the cost of the home inspection but that is the price you pay for taking a bite of apple so to say.
The cost of the home inspection is well worth it considering the headache you would have had in the future trying to make the house livable. Go Watch “The Money Pit” starring Tom Hanks and Shelly Long and you’ll be making sure you know the “As is” condition of every home you purchase from now on.
Good luck in all you do America
Photo: aka Kath