What??? They cancelled my contract and went with another buyer???
I am seeing this more and more. Written within the contract are paragraphs that allow the seller (bank) to cancel the contract for any reason without any recourse to the buyer. And establishes that the buyer be made whole (by refunding the deposit) and that the buyer cannot go after the seller (Bank) for damages... In addition, the contract can also have passive contingencies as well (where a 10 day contingency is actually removed passively at midnight of the 10th day, usually includes financing, appraisal and/or property condition)
Hmmmmmmm... In a normal contract, AFTER the contract is negotiated, there can be minor things that are worked out between both parties. Like remove the debris, fix that hole that wasn't disclosed, make sure the utilities are on when we do the inspections, did you order that environmental report (required per contract in most of CA), can I get some other form, etc... If the seller doesn't want to do the items, then we get involved and try to come to some sort of agreement.
In a normal contact again, the seller normally cannot cancel a contract when the buyer makes requests regarding these items. It is safe to assume that buyers sometimes will ask for lots of stuff, without fear that the seller will cancel the agreement. It seems reasonable to ask for items that the contract requires, and can be considered reasonable to ask the seller to fix/repair/give credit to buyer as well. A lot of times the buyer is asking for things from the seller so that they can confirm that they have seen and have been fully disclosed all aspects that can affect the value and desirability of the property in the prior to removing their contingencies.
So back to the REO transaction... Assume that an REO has multiple offers. Bank accepts one, and the one that they accept is yours. WOOOOO WHOOOOO. You are soo happy! You ask the agent for the mandated disclosures, and let him/her know you are doing inspections. And the following occurs.
"I don't have those disclosures yet/the bank doesn't have to give you disclosures/the utilities are off, and will not be turned back in" oh, and here is the kicker... "We have back up offers, and we are considering taking one of them if you are not interested in the property" AND don't forget the passive contingency removals...
Kind of unfair huh? If you try to negotiate, they can cancel and take another offer. If you demand that they give you the mandated forms and they do not want to, they can cancel your offer and go with the next one.
I remind agents to read the entire REO addendum that is added to the contract before agreeing to it. Remember, there is little to no negotiation with the addendums, and a lot of times it's "take it or leave it"...
Have you seen this, and what do you do in this situation? OR what would you do, or what have you done? I would love to create a discussion on the things that we as agents can do regarding these situations.
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