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Bank Owned Addenda

Ok, I just wanted to see if you are all in the same boat. Here in AZ we have a lot of bank owned houses on the market. Because they're agressively priced and so abundant they are the only houses my current clients are viewing and buying. I'm okay with that and have nearly perfected my "as is" speech. The thing that's making me crazy are the bank addendums. They are long, complicated and not something I have any comfort level with.

I know we are not legal experts and always recommend my client have a lawyer review any contract they sign, but the recent bank owned home I'm working with replied to our nice little 9 page AZ contract with a 16 page Counter/Addendum that is filled with legaleze. I recommended my clients have a lawyer review it before they signed it, but come on. 16 pages? Do we really need all of that?

What have your experiences been? I'm not a REO lister, maybe you can shed some light on this for me. I've had the buyers cross out and initial/date items they object to, but how do the banks take that? I would love to hear your experiences. Thanks!

Julie in sunny AZ

Posted by Julie Heyer - Gilbert AZ Realtor on 03/31/2008 11:55 AM

Comments (6)

reo, bank owned homes, addendums, addenda, foreclosure, counters, banks, contracts

6 Comments on Bank Owned Addenda

In my experience, banks don't like to see you crossing out their addenda. They are covering themselves against a property that they took possession of through foreclosure, so it truly is "buyer beware". As long as your clients understand what they are getting into and that there are risks involved, then that is all you can do.

But, I definitely think you are right to advise them to seek legal counsel.

03/31/2008 12:10 PM

by Chelle Gassan-NOVA Realtor and Stager (Weichert, Realtors and Staged Homes VA)

Any bank-owned home that I've sold has come with Counter/Addendums. It's just something I've learned to warn my buyers about before making an offer. I haven't had anyone cross anything out, so I'm not sure how a bank would react to that. Each bank is probably different...

03/31/2008 12:13 PM

by Debi Ernst, Real Estate Broker/Agent (Ryco Realty Group)

Hi Julie,

You have to accept change in this world and boy is there alot of it these days! I just closed a Countrywide foreclosure in Los Angeles. the addendum was approx 20 plus pages.

To be savvy in this is challenging. good advice to get the atty involved. maybe contacting and having lunch with a an asset manager will give you some insight. you can contact me if you like Lance @ kettlerreo.com

take care

Lance

03/31/2008 12:16 PM

by Lance Kettler

Thanks for the input.

Lance-yep, this is Countrywide too. They're definitely making good use of thier legal counsel with this addendum!

Chell-I have gotten changes through with other banks, but this is my first with Countrywide. I don't think my buyer wants to make any changes, but I was curious if others had done this.

Debi-I think you're right, each bank will be different. Learning to go with the flow in the new real estate age :D

Thanks again guys,

Julie in sunny AZ

03/31/2008 01:07 PM

by Julie Heyer - Gilbert AZ Realtor (Right Home Realty)

The banks are protecting themselves which is why there is so many addendums to the contract. I would educate the buyer and definately tell them to have their attorney look over the paperwork. Whenever a legally binding document is signed is should always be reviewed by an attorney first.

03/31/2008 01:23 PM

by Amy Testa (Auburn Sherlock Homes Real Estate, Inc.)

Julie, care must be given to understand each little detail that the banks are sending over on their preferred paperwork. Remember, if a bullet point makes it into a contract, it is probably the offspring of a court case.

03/31/2008 02:14 PM

by Mark Organek - Tempe Gilbert Mesa Chandler REALTOR (RE/MAX Alliance)

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