Stupid REO's

Hello,

I'm new as an investor, but you might contact one of our Top User's for assistance.

Good Luck!

Could you post the listing description? You don't have to post any details of the property. But I've seen some listing descriptions here especially were it read "ADDENDUMS REQUIRED WITH FINAL CONTRACT" offer accepted only after acceptance of addendums. Worded something along those lines. Anitarny would be a great person to contact she explained in one her postings how she handle similar situation where Lender was demanding that she change "and/or assigns" in her contract with the deal she was closing.

If they've accepted your original offer as it were presented to them, don't back down get your RE attorney involved, if you have one retained to fight bank.

Hi J-N,
Was the assignment clause on the initial offer? If so, they can be forced to close............Lubertha

This situation stinks is. It is 1 of the obstacles I anticipated. Cash offers require certified funds. That means the bank will bank on getting EMD, addendums signed, buyer backs out but EMD takes 30 day return.
I am upset the pendelum has swung from giving money and property to anyone with a pulse to the door slammed in the face of responsible people with a means to invest. I am still knocking on doors for a deal, I will find 1.

that's the only thing that stinks about REO's is that they usually don't want any contingencies on the property. They just want to make their money and go home. Do you have a buyer for the property?

This is why it is important to have a lawyer as a part of your team. If what you say is true and the contract was accepted, then the bank cannot suddenly say oh wait no hang on "re-do" Your lawyer would be able to take care of this because the bank is already losing money on the house they don't want to lose more on court fees.

Where are the signatures? That is the most important part...if the bank signed off on it, then it is a signed contract a court would uphold that.

f you signed a loan with a bank and then said hey wait a minute, I don't want to pay 10% interest they would laugh in your face, its signed and done.

On the other hand, if they never returned a signed copy to you, then your out of luck on that, sorry, they just "preliminarily" accepted your offer and you have to agree to their contract.

Again, a lawyer on your investing team is so important because he/she could resolve this issue instantly.

Thanks and let us know what happens,

Vern

That's what I was trying to explain in my earlier post. Great minds think alike

As a litigation paralegal for oh, about 100 years, and as a Realtor who sold only REO's (no short sales) for my former broker in MA, stick to your guns, hire an attorney and see what you can do. It doesn't matter to the bank if what they're doing is making a whole new contract - and it's not legal for them to remove your "and/or assigns" if it was on your original offer. They don't care about legalities - believe me. They don't want to get sued, but these banks have big doggie attorneys working for them.

In my experience, even if you sue, it's just the cost of doing business for the banks, so don't think that they're just going to back down the second they get a letter from a lawyer. Lawyers don't scare them - they scare lawyers.

With that said, go ahead and see how far you can go down the road. Sounds like it was a worthy property. Good Luck!
JennyInMalibu

No, I didn't have an end buyer yet, but I was working on it...

To answer another question, here is the listing
PUBLIC REMARKS: Lots of built in equity. Home is assessed at $429,108. This home is huge! Needs some TLC but once done what a deal. Set a showing today and see for yourself what potential this home has. These are the type of fix and flip deals on TV!!! Property will be sold as-is.
MLS/AGENT ONLY REMARKS: Provide a loan letter/proof of funds letter with offers. Make earnest money due upon acceptance. Title company and disclosures are provided post offer. Offers may be emailed to [email protected] or faxed to (719)546-6646. Please call **Centralized Showing** at 888-229-2208 to schedule all showings. Also please have your appraisers and inspectors call centralized showing to schedule their appointments as well. Buyer is responsible for turning on all utilities for inspections. Please write the following statement in paragraph 25 of your offer. Buyer is willing to pay the REO Admin Fee of $195.00 at closing to Realty One Group

There is nothing about separate addendum's that I can tell

that answers my initial concern. Since you had the "and/or assigns" in your initial offer to bank; and they accepted they shouldn't be asking you to change it all suddenly. I know some banks here at least don't know about elsewhere are pulling that crap regarding Final offer only being accepted after Their addendums have been sign & accepted by purchaser. I have to agree you're in for fight if you take it t litigation. Kindly remind them that you sign all pages of Final Acceptance Offer with your signature and/or assigns unless they're not wanting to pay any penalties or face a lawsuit; they continue with the sell as it was accepted by them. Keep us posted.

Jason & Narissa:
Not to beat a dead horse re the Addendum, but most brokers selling REOs for the banks actually put in the MLS listing that "buyer to sign addendum".

See the REO broker I worked for in MA's website; he always put in the addendum part right on the MLS.

http://www.hoskinsrealty.com/listing.asp?SearchType=ByOffice

Now, if your offer was accepted, then you went into the listing agent's office and signed the Addendum with your deposit money, and then that agent got the lender to sign off on the Addendum, then it should be wrapped up for you.

However, the bank is trying to pull a fast one on you. Get a laywer immediately to fire off a letter to the bank or shoot one off yourself threatening litigation and "specific performance" - that means the bank has to go through with the sale to you.

Nevertheless, don't get too emotionally involved because at the end of the day, as I said in a prior comment to you, this is just the cost of doing business for the bank, and lawsuits don't scare them.

In your letter to the lender, make sure you mention "specific performance" and that if you are forced to pursue legal avenues, it will only tie up the property longer and longer on the bank's books (even though they may accept another offer meanwhile, and sell it behind your back). Shoot that letter out today! Best via email and certified mail, return receipt requested!

Keep us posted!

Oh! I forgot to mention that this MLS listing language is frightening!

I've never seen, but that doesn't mean it's not true, a REO MLS listing where it says "Buyer is responsible for turning on all utilities for inspection"!

These are REO's for heaven's sake! If Buyer is forced to pay to turn on utlities just for an inspection, that reaks of bad faith to me. Electrical lights are one thing, but if you have to turn on the water and the property's been dewinterized (meaning all fluids drained out of pipes), then you could be in for a rude awakening. If you don't turn on the water, all your inspector can do is a "dry" inspection (meaning he didn't inspect anything to do with the plumbing system).

Most REO brokers and lenders will have the utilities turned on during the sale phase. If they don't, then buyers are scared to pay to turn on the utilities, and then the properties just languish on their books - that's why most will turn them on.

However, if you think the property is worth that risk, go ahead with your inspections.

I'm curious - if this is a REO, how is it that there is equity in the house? There are some states that if a home goes into foreclosure and the former owners had a TON of equity in the house before they lost it, when the bank re-sells the house, SOMETIMES (rarely) the former owners will receive some of their equity when the house sells.

Also, this crap about "Buyer is willing to pay the REO Admin Fee of $195" is crazy! That's what they call a junk fee; I'd refuse to pay that!

Good luck!

Is it best to avoid those properties where the service meters e.g. electrical, water, and or gas have been totally remove? I don't wanna be paying all these fees (turn on) if I don't whine up actually buying the property. Will lenders turn on the utilities if your serious with going through with the closing for buyer's inspection?