Why Spend Money For Inspections Prior To Short Sale Approval.

By
Real Estate Broker/Owner with Tutas Towne Realty, Inc and Garden Views Realty, LLC BK607690

Florida short sales


Good morning folks. We have a great discussion going on over at http://Shortsalesuperstars.com about Home Inspections and when to do them. Check it out.


Here are my thoughts:


First, there are advantages to the Buyer doing the inspection promptly. The main one being that If there are issues with the property the price can be adjusted PRIOR to the short sale being submitted to the lender. Secondly, why would a Buyer want to wait several months to do an inspection only to find out the property won't work for them?


As a Short Sale Listing Agent, having the inspection done asap is not the real issue. The real issue is  the inspection contingency. If it's a good Buyer and they truly just do not want to spend money on the inspection before the approval then just write the contract and remove the inspection contingency. This way the Buyer can do the inspection later but if they cancel over it they lose their deposit. Make sure you get a good deposit at time of contract.


If the Buyer is still not agreeable you could negotiate the contract allowing the Seller to continue to market the property and accept a better offer if one comes in. Give the buyer a First Right of Refusal.

 

Basically you need to make sure the Buyer understands that the Seller needs them to commit to the deal. If the Buyer won't commit then certainly the Seller shouldn't.


There is nothing worse than a Buyer using the inspection contingent to get out of a deal after we have worked for months to receive the Short Sale approval. 


What say you?



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 Tutas Towne Realty, Inc handles Florida real estate sales, Florida short sales, Florida strategic short sales, Florida pre-foreclosure sales, Florida foreclosures in Kissimmee Florida Short Sales, Davenport Florida Short Sales, Haines City Florida Short Sales, Poinciana Florida Short Sales, Solivita Florida Short Sales,  Orlando Florida Short Sales, Celebration Florida Short Sales, Windermere Florida Short Sales. Serving all of Polk, Osceola and Orange Counties Florida. Florida Short Sale Broker. Short Sale Florida.

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Rainmaker
741,492
Ritu Desai
Samson Properties - Ashburn, VA
Virginia Realtor-Fairfax/Loudoun/PW-703-625-4949

Bryant, valid point to get the home inspection done so everyone knows where the home stands and can offer/negotiate accordingly

Dec 04, 2012 10:24 PM #1
Rainmaker
592,907
William J. Archambault, Jr.
The Real Estate Investment Institute - Houston, TX

Bryant,

I think it was yesterday that I commented on the same subject posted on the Short Sales Superstars news letter.

Bluntly, my position with regards to short sales is to let any inspection contingency including appraisal and a preliminary title report go beyond 10 to 14 days violates all fiduciary oblations! Weather to the seller, the buyer or the transaction!

For the listing broker to allow such a delay risk most chances of finding another buyer or rewriting the deal to a closeable form before foreclosure. (I feel the same about wasting the seller’s time if foreclosure is not eminent.)

For the buyer’s broker to allow such a thing depends on the buyer. If the buyer wants a home to waist months to save a few hundred is absurd! Explain risk and get the inspections done why wait if the house doesn’t pass? Find them a home! Low-ball investor offers may be different, but the listing broker should have protected the seller, see above.

Transactional brokers weaher listing or selling will have no transaction until these contingencies are waved and risk having no second chance after wasting precious time!

My suggestion is all such contingencies be waved before the seller’s lender sees the offer! If the offer needs re-negotiated it should be done before submission the lender! I’d rewrite and submit a clean contract and I’d included any costly items in my cover letter along with the inspection reports for the seller’s lender to see.

If the buyer made a good offer he’s going to have to spend the money, the only question is now or possibly months from now.

Respectfully!

Bill

Dec 04, 2012 11:21 PM #2
Rainmaker
1,142,035
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time

Bill I think you and I actually agree for a change :)

Dec 04, 2012 11:55 PM #3
Rainmaker
592,907
William J. Archambault, Jr.
The Real Estate Investment Institute - Houston, TX

Really Bryant?

I don't recall many disagreements, transnational brokering* excepted.

I think most of our differences are in verbiage.

Anyway way we don't argue.

Often.

Bill

* As we've discussed over and over I prefer fiduciary brokers, but find your way much more honest than most.

Dec 05, 2012 01:32 AM #4
Rainmaker
982,078
Kevin J. May
Florida Supreme Realty - Hobe Sound, FL
Serving the Treasure & Paradise Coasts of Florida

BB, how inspection reports have come to be escape routes for buyers is our fault.  Like any other terms of a contract they're there to protect your interest.  Whether you're an investor or end user should have no bearing on the use of one, however the ability to waive it's findings as a negotiating tool is crucial.  Having the contract subject to the inspection and getting it out of the way early in the process provides good faith to all concerned partirs.  An amendment waiving the results and subsequent price adjustment, if any, simplifies matters moving forward.  Like Bill states, 10 to 14 days is reasonable to acomplish this.  Regarding the use of a first right of refusal, I could not recommend that to my Seller.

Dec 05, 2012 01:36 AM #5
Rainmaker
316,579
Frank Laisch
Orlando, FL
"The Insurance Guy"

Great post Bryant, Inspections are so important.we have seen deals falling apart due to inspections, the sooner the better

Dec 05, 2012 08:09 AM #6
Rainmaker
4,796,451
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Some excellent points and something all short sale agents should consider.

Dec 05, 2012 09:12 PM #7
Rainmaker
2,229,943
Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

I have a different slant on this issue. I have been buying houses to flip for a long time. I buy short sales on a pretty regular basis. If there is a property that I really like, I will spend the money for a home inspection, appraisal and budget to renovate the property. I have for the expense to be worthwhile. I am not always successful, but more times than not I am.

Dec 08, 2012 03:37 AM #8
Rainer
171,030
Robert Butler
Aspect Inspection - Montreal West Island, QC
Montreal Home Inspector | Aspect Inspection

Here (Montreal, Canada) you don't get to negotiate with the bank in that situation. You are well advised to have the inspection before you make an offer to purchase. Basically the sequence is completely reversed from a private sale.

Dec 10, 2012 09:56 AM #9
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Rainmaker
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Bryant Tutas

Selling Florida one home at a time
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