I am recently became intereseted in purchasing an REO property. The listing agent included an addendum that doesn’t seem to be for the buyer at all - even though the bank is motivated. It states:
Buyer obtaining financing will contact & be pre-approved with at least one of the following:
The buyer is not required to use of the aforementioned mortgage companies (A,B or C) unlsess the lender of the buyer’s selection fails to close per this agreement.
If buyer contacts lender A,B, or C & they decline buyer, seller within 3 days of agreement terminate contract & refund $.
This clause appears to completely disregard any type of financing contingency a buyer could put in place?
What if you buy the property, get it inspected & only to realize there are foundational issues. Can/Would the lender still finance the property?
You will not be able to find financing for a home with foundation problems unless you escrow for the repairs at closing. What the listing agent is asking you to do is at least get a pre-approval from one of their lenders even though you don’t actually have to use that lender. This seems like a colossal waste of time if you have your own lender. I would contact the listing agent and let them know you already have a pre-approval from your current lender and do not wish to have your credit pulled again by a lender you do not plan to use. Hope this helps.
Ive only bought 3 properties but they were all reos. I learned pretty quick that contingincies are a waste of time here(In my experience). as far as the addendum with financing, I got the same thing, tried to get pre-approved with their lenders and couldnt, they all refused me. I still bought the property. submit your offer with pre approval from your hml and see what they say. As far as the structural issues, go buy a book on foundations,read it, then go look under the house. If it has problems dont buy it( on your first ). Its not that hard to detect. Once you know theres nothing wrong with it, and youve established that its a deal, dont worry so much about an escape clause,you want the house!