I am seeing more and more 'fine print' in counter-proposals from banks on foreclosed properties these days. In fact, I am on my way to an inspection on a foreclosure property soon…BEFORE my client signs the counter-proposal…precisely because of that.
My client got the winning bid for the property and his offer was subject to inspection. In a standard transaction the inspection is not completed until AFTER the agreement has been signed by all parties.
However, in reading the fine print on the papers the bank who owns the property sent to be signed it stated that…"Buyer acknowledges…that Buyer has either (1) completed all inspections and removes any inspection contingency and/or (2) waives inspections and by doing so removes any inspection contingency; Purchaser acknowledges and agrees that inspections are not a contingency of this contract."
SO…we are off to the inspection this morning…BEFORE signing!
Seller-paid closing costs and prepaids are also very common in purchases by first-time homebuyers, which includes many foreclosures. Banks are now frequently refusing to pay pre-paids (interest, taxes, insurance), which can make a significant difference in the amount of money you can use as seller-paid closing costs. Again, be sure to read the fine print…if you can't use all the money the bank has agreed to pay towards your closing costs, you will not get a refund!
Standard purchase agreements all have the same verbiage which real estate agents should be familiar with…but bank counter-proposals and contracts are not all the same!! BUYER BEWARE…read the fine print!!