Just yesterday, I was talking with one of the agents in my office who asked me if, in a transaction which is on a foreclosure, the bank would accept to make repairs.
The majority of the agents who get this question would respond NO, it is sold AS IS. In my personal experience, I think that is not always the case. Everything depends on how you write your contract, and the type of stipulations you write to protect your buyer.
Here in Georgia, for instance, you cannot sell a property that has a termite infestation, but the Termite Letter is no longer a requirement to close in some cases. In one of these contracts which I am working, I wrote that my client (the Buyer) will pay for the Termite Letter, and if the house is found to have termites then the bank/seller will pay for the treatment. The bank accepted this stipulation, with a dollar amount limit, and guess what? The house has termites – and the bank is paying for the treatment (no repairs necessary).
I wrote another stipulation which said that the house is sold AS IS, but if the buyer’s lender requires repairs as a condition of the loan, the seller must make those repairs and pay for it. Sure enough, the house needed some, and we are working on it.
My buyers are thrilled with the fact that all these amounts are not coming out of their pockets, and are ready to close. I really believe that, depending on the type of transaction you are working on and the type of buyer, Banks are more open to perform repairs if necessary. In this case, the repairs came to around $2,500.
In another transaction that closed a month ago, the Buyer’s Lender required that the main door and lock (that the asset management company broke in order to get inside the house after the foreclosure) be repaired. Sure enough, the lock and door frame were replaced and repaired before closing.
Sometimes it is not the amount of money that the buyer is saving, it is about showing your knowledge and integrity. I am confident that these clients are going to recommend me to their family and friends for all their Real Estate needs. We are building clients for life.
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