I am getting ready for my 1st flip but I definitely want an inspection. Do you do anything different on an REO than a normal purchase as far as contingencies are concerned. Do I have to get an inspection before making offer.
Howdy Buckeye35:
Most REO sellers have a special addendum that they require the buyer to sign. Most of them talk about as is where is with seller making no repairs or warranties. Also the deed will be a special warranty deed from most REO sellers. As long as the title company will sell you a title policy you will be OK here.
I would never make an inspection before making an offer. Inspections cost money. The only time to violate this is with foreclosures where you buy at the courthouse and auctions where you are bidding as is where is with no inspections after the auction.
Here’s the dilemma. I think there could be some foundation problems and I want to be able to withdraw my offer if the repairs are going to be too costly. I can still do this, correct?
Howdy Buckeye35:
Most contracts have an option period where you inspect and if you do not like you can walk away. The option amount can be small as negotiated between the parties. I usually ask for $100 on a house and only put up $20 when buying.