Thread: "As is" inspection found major probs-Room for negotiation?

P.S. Sorry for the long post.

Originally Posted by RandolphMantooth

During the inspection period after our offer was accepted for a bank-owned property, we found that the home had major wood rot and drywood termites, leading to the home needing to be lifted and several beams needing to be replaced. It also needs fumigation and replacing bathroom floor/walls. This is more than we bargained for, but we still want the house. We had a cash "as is" contract, and that offer was accepted.

1. Can we amend the offer without canceling it or would we just take back the offer and write a new one based on what we found? Do we lose our place in line?

Would need to see the contract to answer this.

Originally Posted by RandolphMantooth

2. We have almost $1,000 invested in inspections and surveys, and we don't want to cancel our offer and make another if the bank or agent is going to sell it to someone else. Do we have any sort of rights of first refusal? So far, there have been no other offers, and no one is interested in the home, but they might not know the bank-approved price yet.

Nope. At this stage you don't have an offer, you have a contract. If you walk away from the contract you are no longer at the front of the line. In fact, this might cause the bank to hesitate to go under contract with you again.

Originally Posted by RandolphMantooth

3. The agent in this brokerage transaction implied that she was previously thinking about buying the home herself for what we had offered (before our offer). Maybe to scare us into taking the current price? She can't really take the info from our inspections and then buy the home out from under us for that amount, can she?

She sure can.

Originally Posted by RandolphMantooth

4. Also, if she's representing both parties, so to speak, can she offer the house to someone else at the current accepted price? Do we lose our place in line? The home was listed for $120K and we offered $80K, and the bank accepted. A fair price, we think, after the foundation problems were found, would be $70K. Can the agent offer it to someone else for the agreed upon $80K.

If she is the foreclosure listing agent then you have no representation and she is working for the bank.

Originally Posted by RandolphMantooth

Any other way we can negotiate? Cash at $80 doesn't leave us a ton of reserve money to make repairs, so the idea of unanticipated repairs on top of that is pretty daunting.

Could we negotiate for the same price but with financing, changing the cash offer to a financed one? We'd put so much down the loan would be easily accepted, I think.

As I said, we like the house and have a ton of time and money invested, and we'd hate to lose our place in line, so to speak. I guess in the end, we'd be leaning to take it, even at the current price, rather than find temporary housing, lose our inspection money, start the hunting process over. Are we endangering our position by offering a lower amount (well documented and tied directly to repair costs)? The property is in St. Pete, FL, if that helps. THANKS

If you are still in the inspection time frame of the contract then ask the bank to fix these items or reduce the price. Sometimes banks will fix problems of this magnitude if it looks like they won't be able to sell it any other way. The listing agent will have to disclose these issues to any future prospective buyers.

The worst they can do is say no and then you will have to decide if you want the house as is or not.

It pays to have your own agent working on YOUR side.