Murfreesboro Real Estate

   There are many “good buys” in today’s market.  Some sellers have very little choice to get out from under by accepting sales prices and terms of sale that represent great value to home buyers in Middle Tennessee and throughout the country for that matter.

   Bank owned properties can be fraught with additional danger and risk for the unassuming home buyer, however.  A well informed buyer will want to have a knowledgeable buying agent to advocate for and to help protect their interests, particularly when buying real estate, as is, with no express or implied warranties!

   Did you know that many times a buyer and their agent will have reached a verbal agreement (e.g. meeting of the minds if you will), only to learn that a a 30+ page REQUIRED addendum then must be signed.  In one recent case, one of my agents and his buyer were given just 3 hours to review, sign, and return to the seller all such voluminous documents.

   That somewhat “coercive” practice, by that particular bank, reminded me of the TV series, Lost in Space… “Danger, Danger Will Robinson!”  Why would a seller place so much pressure on a buyer to sign such a one sided legal document?

   Probably several reasons.  I am finding many instances whereby sellers are hiding behind their right to be exempt from Property Condition Disclosure (because they have not resided in the property for 3 years).  However, a savvy realtor should advise their buyer to consider the following (illustrative only; not intended to be all inclusive):

1. Request and previous inspection (termite, septic, well water tests), and appraiser required repair reports on said property. That information is likely to be highly informative to the buyer when assessing their risk and future repair costs.
2. Request a list of repairs previously performed by the seller.  Obtaining such information would enable the buyer to inspect if said repair work were done in a quality and satisfactory manner.
3. Read the fine print of these documents and recommend that said document be subject to their own attorneys review and approval.
4. Beware of clauses that state that the buyer waives all rights to file any legal action against the seller for specific performances (while the seller retains all rights to sure the buyer, including for punitive damages).
5. Beware of language that results in the buyer being obligated to pay $x/day/diem (typically ½ to .01% of sale price) to seller, for each day that elapses beyond the original closing date, regardless of reason for the delay!  Many times, closings of bank owned properties are delayed because of “clouds” on the title on the seller’s side (liens, etc)!  Is it fair that the buyer has to pay the seller even though the seller is the cause for the delay?  I also think not!
6. Don’t believe seller’s overtures that by using seller’s title company to close the transaction, that the buyer will save considerable sums of money.  I know of one instance whereby a buyer was duped into thinking that and wound up paying excessively for the cost of notary services ($125.00) and further, the seller’s title company did not communicate that the seller only had 5 acres to convey verses the 11 acres specified by the contract.  The buyer unknowingly closed but discovered months later that they owned considerably less land than was expected.  Buyers should get their own survey, as a condition to sale, prior to closing.  Title Insurance policies do not protect buyers on land disputes without a survey.
7. Be mindful of the fact that a bank may have previously contracted for mold to be removed (or simply covered up with paint).  Some required addendums clearly state that: “mold may have been cleaned but the seller does not warrant the cleaning, repairs or remediation, or that the property is free of mold.”
8. Have a contingency in place if the buyer agrees to language such as: “the purchase price is insufficient to pay the sum of the closing costs, taxes, commissions, and any liens, then the seller shall have no further obligation to the buyer, including but not limited to, reimbursement for any expense.”
9. Understand what could happen to a buyer if a Redemption Clause were to be enforced (i.e. “buyer understands that the property may be subject to redemption by the owner and that the buyer may be depossessed of the property.  Buyer agrees buyer shall have no recourse in the event the Right of Redemption is expressed.”  Note: this actual language has no time limit!

    10.  “As Is” also includes acceptance of properties that are in non compliance with building codes, zoning, land use requirements, etc.  Buyers, do your diligence before agreeing to all contract terms and conditions.

   For expert guidance (or training if you are an agent considering a real estate company change) when purchasing foreclosed and short sale properties, call my cell or text me.