Buying Metro Detroit foreclosed properties

When buying Metro Detroit foreclosures you have to read the bank addendums carefully.  I give you my most recent case.  I have taken over a purchase agreement to the seller’s agent.  We had gone back and forth verbally to reach an agreement.  The bank and the agent agreed to the price and the seller’s concessions.  They just wanted to change the closing date sooner and wanted $1000 in deposit instead of $700.  We agreed.  That was a week ago Tuesday.

A week ago Wednesday they say they are waiting on signed paperwork.  A week ago Thursday they fax over the paperwork.  Low and behold it is the banks addendums.  Unsigned.  So I sit down and start reading them.  This is a must for every agent and every buyer that is buying a Metro Detroit foreclosure or any foreclosure.

They wanted us to add to the Purchase Agreement that the addendums over road everything in the PA.  That was okay if the addendums were ok.   BUT…….

  • In the first paragraph it basically says that if the contract is not signed by the bank that they could take any deal even though they verbally accepted our offer.  The other agent even gave me a sheet saying that “congratulations on your accepted offer”  So we crossed that off and initialled it.
  • Then they want us to close in less than 25 days with a holiday and 3 weekends in there.  And they don’t even have the signed contracts back to us.  Then in the contract they want to charge us a $100 a day if we don’t close on time.  So we scratched that off and initialed it.
  • Then they wanted us to pay for transfer taxes, title insurance, and title closing costs.  We crossed that off and initialed it.
  • They then upped the sellers concession to over 6% to pay for $600 of the title insurance.  Unfortunately FHA only allows 6% sellers concessions.  The money would have to come out of my buyers pocket.  We crossed that off and initialed it.

So we had verbally agreed to price, seller’s concessions, time.  But then the bank and the agent wanted to change the ball game to their rules.  As an agent I have to protect my client.  I can’t let the lister to not complete the deal when we have a verbal agreement, just because they haven’t signed it.  No way.  Just because they got another offer. We have a verbal agreement…….  I can’t allow a bank to put unreasonable time constraints on the deal.  And let them waste time.   I can’t let them charge my clients a $100 a day.  I can’t put my clients at financial risk.

So when buying Metro Detroit foreclosures protect yourself.  Read the addendums carefully.  Change them, initial them.  If the bank doesn’t accept the changes, then you have to decide if you are willing to accept the addendums as is.  How bad do you want the house.  How good of a deal is this Metro Detroit foreclosure?

For more on Metro Detroit real estate info feel free to go to my other website www.RussRavary.com.

 

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Posted in Blog, Buyer Tips, First time home buyers, Foreclosures, investment properties, landlord

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