Buyer Beware of those REO special Addendums

By
Real Estate Agent with RE/Max Infinity - www.AmySellsAZ.com DRE# SA528757000

Arizona REO Bank AddendumsREO (which stands for Real Estate Owned.  That doesn't make sense either so most folks know them as Bank Owned) properties offer some great opportunities for buyers in today's market. 

Most buyers are aware that these properties are generally sold "as is", and buyers must accept the fact that they are purchasing a home without the benefit of knowing the home's history of repairs, or well...anything else about it.  Can you say "Buyer Beware!"?  That's why you have a professional inspection, right?

But did you know that the Seller (which for an REO property is the lending institution that now owns the home.) will almost always require the buyer to sign a special Addendum to the Purchase Contract?  These Addendums vary with each lender however, they all change the provisions that you originally agreed to when you signed your offer on the standard in the Arizona Purchase Agreement. 

It's important that you read through any Addendums from the Seller carefully prior to signing them.  Of course, this is true whether it's an REO property or not.  Make sure you understand what you are signing (your Realtor will be able to help you with any questions you may have)!  The REO Addendums are almost always weighted heavily to benefit the Seller.

Here are a few examples of some of the changes these REO Addendums may contain:

  • Changes in Close of Escrow Date
  • Alteration of the inspection period, response time frames & cancellation provisions
  • Alteration of Seller warranties
  • Alteration of the financing provisions & removal of Unfulfilled Loan Contingency
  • Monetary penalties for buyer's failure to close on specified COE date (Note: This does not affect seller's failure to close on time!) and request for extension of COE date.
  • Limitations of seller's liability
  • Alters/removes mediation, arbitration and specific performance provisions
  • May add automatic termination of contract upon breach (by the way...if you agree to this and your funding is late due to no fault of your own, it doesn't matter.  This automatic termination means the Seller can cancel the contract and keep your earnest money).
  • Removes Cure Period (has nothing to due with illness...ask your Realtor!)
  • May add specific monetary remedies upon breach/cancellation
  • May add specific provisions for Seller unilateral cancellation
  • Required time frames for Seller review and approval of HUD-1 Settlement statement prior to close of escrow
  • Seller to convey title by Special Warranty Deed
  • May alter type of title insurance policy to be issued to buyer

If you don't understand these, fear not....if you're represented by a qualified Realtor that is.  Your Realtor is there to help you understand how each item may affect you and what you may be giving up when you sign on the dotted line.

Posted by

 

 

©2007 - 2014 Amy Jones. No article or image may be used without permission by the author. Some posts are also posted on Chandler Real Estate and Sun Lakes Real Estate

Join the Amy Jones Group on FacebookFollow Me on TwitterLink to me at LinkedInGoogle MeYourSunLakesLifestyle.comSubscribe to my Blog

 __________________________________________________________________________________________ 

    Chandler homes for sale                  Sun Lakes Homes for Sale            Gilbert Homes for Sale         Tempe Homes for Sale             Ahwatukee Homes for Sale
    Chandler Homes               Sun Lakes Homes            Gilbert Homes            Tempe Homes           Ahwatukee Homes

 

Amy_Jones_Realtor

Amy Jones, REALTOR®, CNE, EPro,CDPE, CSSPE
RE/Max Infinity ~ 2450 S. Arizona Avenue ~ Chandler, Arizona 85286
Direct 480-250-3857 

RE/Max InfinityChandler, Sun Lakes, Gilbert, Tempe & Ahwatukee Real Estate

Voted Chandler's BEST REALTOR for 3 years!

 www.AmyJonesGroup.com
www.PhoenixArizonaRealEstateBlog.com 
www.YourSunLakesLifestyle.com

 

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Topic:
ActiveRain Community
Location:
Arizona
Tags:
reo arizona
addendums

Anonymous
Post a Comment
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the tshirt to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the sunglasses to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Anonymous
Post a Comment
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the truck to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Rainmaker
491,255

Amy Jones Group

Recognized as the #1 RE/MAX Team in the Valley
Would love to hear from you!
*
*
*
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the eye to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Additional Information