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Bank Addendum

By Sabrina Kelley

Real Estate Agent with ERA Herman Group Real Estate

March 02, 2009 07:06 AM

I am working with my 1st bank owned addendum. Oh my goodness.

I can't believe some of the things that are written into this so called counter offer. I guess I am lucky that it is only eight pages instead of the 20 page addendum that some other agents have mentioned.

We have to close in a little over thirty days, final loan approval has to be finished at least ten days before closing and if we don't close on time then it is $50. a day for each day we don't close. HUD statements have to be in the bank's hands for review 3 days before closing. The bank can also continue to accept offers.

Those are some of the lesser items of insanity. The bank offers no flexibility and they don't have to extend any dates if they so choose.

What a piece of work. I suppose once I finish this transaction I will have a whole new level of appreciation for these types of transactions. I will also have a stellar perspective as well as newly gained knowledge as how to inform buyers to proceed with these transactions.

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Susan Haughton

Long and Foster REALTORS (703) 470-4545 - Alexandria, VA

Susan & Mindy Team...Honesty. Integrity. Results.

I don't know why it takes 8 pages to say: You will do what we say, when we say or you won't get the property. LOL Essentially, that's the message...it just took a team of attorneys to expand that into 8 pages. Welcome to the wacky world of REOs. p.s. Honestly, I have been dealing with banks for the past few years and it's not nearly as scary as they make it sound. I have never had a client be disadvantaged by anything in the bank addendum. I'm sure others have different stories, but I don't have any horror stories. Oh and about their timelines? Uh, yeah, I've had them receive a HUD 2 hours before closing - no issues.

Mar 02, 2009 07:22 AM

Terry Lynch

LAR Notary and Closing Services - Saint Clair Shores, MI

They should save us the trouble and just post their own purchase agreement. That's the way it ends up anyway.

Mar 02, 2009 07:26 AM

Vanessa V. Simmons

Real Living HER - Columbus, OH

Realtor

I keep telling myself and my clients that banks do not want to own real estate...

I find it harder and harder to believe especially since they making ti harder and harder for us to sell these properties...

Mar 02, 2009 07:31 AM

Sabrina Kelley

ERA Herman Group Real Estate - Woodland Park, CO

Woodland Park Colorado Mountain Homes and Land

I agree Terry. It might save everyone a big headache if they post the purchase agreement pre-contract.

Very few of the conditions are going to change. Many buyers might consider other options if they know what the bank will be requiring up front.

Thanks for the vote of optimism on no problems Susan.

Mar 02, 2009 08:07 AM

Debi Boucher

Real Estate Showcase Photography - Woodland Park, CO

"Realtor Showcase" - Real Estate Photography/Virtual Tours

And on top of that, they insist that you to reduce your commission. All of them do it, and if I'm not mistaken, they are all insisting on the same reduction? Something is terribly wrong here.

Good luck!

Mar 02, 2009 12:20 PM

Jeff R. Geoghan

Coldwell Banker Realty - Lancaster, PA

REALTOR, Marketing Manager

Yep, you just have to hold your nose and advise the client to roll with the punches...

Mar 02, 2009 02:10 PM

Sabrina, Check out Paul Henderson's blog - Good news on Fanny Mae short sale commissions!

http://activerain.com/blogsview/962986/Did-Anybody-see-this-coming

Debi

Mar 03, 2009 02:57 PM

Kathy Torline

ERA Herman Group Real Estate - Colorado Springs, CO

Colorado Springs Real Estate Blog 719-287-1049

I've done quite a few bank-owned properties, they are always a learning experience. Bottom line, we'd better get used to them as they will be around for awhile.

Mar 03, 2009 09:20 PM

Learning is the key to success with these types of transactions. My current bank owned transaction has gone cold but I feel that I am more prepared for the next occasion. I have heard that as many as one in five homes are now bank owned. Which means there will be another occasion with different circumstances and new challenges.

Mar 04, 2009 12:43 PM

Regina P. Brown

MBA Broker Consultants - Carlsbad, CA

M.B.A., Broker, Instructor

Sabrina, yes many of the brokers here can't believe the terms of their contracts. And the fact that the banks don't always comply with the law by completing required disclosures. Be sure to post to the groups,

Short Sale and Loan Modification Nightmares

Short Sale REALTORS®

Short Sales Pre Foreclosures Bankruptcy and More!

As they cover some of the Short Sale and REO challenges!

Mar 11, 2009 03:58 PM

Silvia Dukes PA, Broker Associate, CRS, CIPS, SRES

Tropic Shores Realty - Ich spreche Deutsch! - Spring Hill, FL

Florida Waterfront and Country Club Living

Sabrina, these addenda seem to "rewrite" the original terms in such a way that it only benefits the selling bank. If this addendum is like other I have seen, it doesn't allow any flexibility of the buyer's part while reserving all the flexibility on the sellers part. The prevalent attitude seems to be, if you don't like it, don't sign it but someone else will. Good luck and hang in there!

Mar 12, 2009 03:13 AM

My buyers didn't sign it. The agent told me that there were two other offers on the table but the listing is still active. I suspect that someone found something they didn't like.

One of the conditions that is difficult in this region is the winterizing aspect. The bank will not pay for de-winterizing and re-winter. Who is going to pay for the issues when water starts spewing everywhere with broken pikes and bad water heaters. A buyer can run into having to spend too much extra money only to find out that the home has issues that are beyond repair or too expensive to repair. And then they have to pay someone to lock up the water and drain the pipes.

Just one more of many other issues with these homes.

Mar 12, 2009 07:01 AM

Bank Addendum

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