Hi all,
There are some bank REO's in my area. I'm interested in the multi-fams. Some say "As is". How does that affect things for the buyer? Any restriction? I'm looking to rehab & rent. Also, Do I treat REO's just like any other property as far as running the numbers? Are there any other considerations to be aware of?
The seller won’t:
The 2 REOs I purchased required $1000 earnest money deposit.
Your Offer to Purchase should include “weasal” clauses that your offer is contingent on financing and inspection plus whatever others you may want.
Take that into consideration and run your numbers as any other property.
I’m hoping to rehab & rent. As long as the needed repairs are not gonna blow the budget, I’m O.K with it. I figure the financing & inspection clauses will save me in case of unexpected bombshells. I was wondering if the “AS IS” term meant anything unusual.
Nothing unusual at all… all REOs and HUDs are sold as is. Good luck!
As-is simply means exactly what it implies. The property is being sold in its current condition as it is right now and where it sits right now. If there is any personal property in the house (such as washer/dryer, refrigerator, or freestanding range), it conveys with the property.
The seller will not make any repairs as a condition of sale and will not give a repair credit at settlement even if your inspection report finds some defects that should be repaired. As a general rule, the seller also makes no warranties as to condition on the property disclosure statement.
The seller will pay its share of closing costs in accordance with the typical practice in your area.
The as is also means that you won’t likely be able to get them to lower their price once your offer has been accepted. If you find during your inspection that something is much worse than you thought, you will likely have to just walk away. The banks normally don’t give any concessions or lower the price once your offer is in.
If this happens, the bank then has to disclose it to the next buyer. You can wait a bit and the bank will lower the price if it sits on the market. It all depends on the area you are in.