What Part of This "As Is" Condition Short Sale Don't You Understand?

By
Real Estate Agent with Lyon Real Estate BRE #00697006

I provide a handy dandy tip sheet for buyer's agents on my Sacramento short sales, which I attach to MLS. Not everybody understands what it's like to be a Sacramento short sale agent. My tip sheet explains much about the short sale process and how short sales work. One of the items on that list is the fact the home is sold in its "as is" condition. This means the bank will do no repairs and give no credit for condition.

It doesn't matter if the buyer discovers through a home inspection that the AC unit is underutilized or inoperative. No repairs. As is. It doesn't matter if the buyer discovers through a pest inspection that dry rot or termites are present. No repairs, as is.  It also doesn't matter if thugs steal the AC unit, which I've had happen 3 times last year. No repairs, as is. In exchange for the lender's loss, the home is sold "as is."

A short sale is similar to an REO but unlike an REO the bank does not want to see a Request for Repair nor an addendum lowering the price -- because the bank has made it clear through the arm's length affidavit that the home is sold as is. Any defects become the buyer's responsibility. The bank is under no obligation to even sell this home as a short sale.

Are there ever exceptions to this? Very rarely. In fact, the odds against it are so rare that it is more cost effective for the sellers to resell the short sale to another buyer who isn't freaking out over repairs than to try to renegotiate with the bank. To consider a repair or credit request, the bank need an addendum signed by both parties. The bank will also want 3 repair estimates. By the time buyers can get that together and the bank rejects it, the sellers could have closed with a different buyer.

Lately, I've been including verbiage in my addendums with buyers in Sacramento that state: The home is sold in its as is condition. This means negotiations are over. The buyer understands there will be no repairs, whatsoever, for any reason. Sometimes I think about adding: "On God's Green Earth," and maybe I'll start including that verbiage, too. Yet, still, buyers are under the impression the bank will pay for a repair. Where do they get this, I wonder?

Moreover, since when does a listing agent's fiduciary switch from the seller to the buyer? Answer: It doesn't.

 

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Elizabeth Weintraub is an author, home buying expert for About.com, a Land Park resident, and a veteran real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento, as well as tract homes in Elk Grove, Natomas, Roseville and Lincoln. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout the four-county Sacramento area with an emphasis on Elk Grove. Call Elizabeth Weintraub at 916.233.6759. Put 40 years of real estate experience to work for you. Broker-Associate at Lyon Real Estate. BRE License # 00697006.

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Photo: Unless otherwise noted in this blog, the photo is copyrighted by Big Stock Photo and used with permission.The views expressed herein are Weintraub's personal views and do not reflect the views of Lyon Real Estate. Disclaimer: If this post contains a listing, information is deemed reliable as of the date it was written. After that date, the listing may be sold, listed by another brokerage, canceled, pending or taken temporarily off the market, and the price could change without notice; it could blow up, explode or vanish. To find out the present status of any listing, please go to elizabethweintraub.com.

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  1. Barbara Martino-Sliva 05/24/2011 08:08 PM
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Topic:
Real Estate General Information
Location:
California Sacramento County Sacramento
Groups:
California Short Sales, REO's, and Foreclosures
Club Chaos
Lyon Realtors
Posts to Localism
Short Sales Specialists
Tags:
short sale
sacramento short sale agent
as is short sale
as is condition
bank repairs short sale
arms length
home inspection
elizabeth weintraub

Comments 9 New Comment

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Rainmaker
713,309
Chuck Carstensen
Minnesota Real Estate Expert
RE/MAX Results

Really to buy a short sale or REO a buyer needs to just DEAL with the repairs.

May 21, 2011 09:38 AM
Ambassador
1,089,579
Melissa Zavala
Broker, Escondido Real Estate, San Diego County
Broadpoint Properties

So, you do it as a supplement to the MLS listing. I actually do something similar and have links to our website (whether the information is housed) in the confidential remarks. I'm not sure that our as-is clause is quite as strong as yours, however. Maybe I need to think about revising.

May 21, 2011 09:42 AM
Rainmaker
138,848
Faith LaRosse
Realtor(R)
Springer Realty Group

Elizabeth, sounds like things are the same on the west coast as they are on the east coast!  Buyers are under the impression (probably from the media!) that banks are in such dire straights that "it's worth a try"... yes, it is a buyers market out there, but AS IS....means AS IS!

May 21, 2011 09:42 AM
Rainmaker
457,221
Geri Sonkin
Long Island Real Estate & Staging Expert
Douglas Elliman Real Estate 516-457-7103

It always amazes me that some people seem to believe "as is" is applicable to everyone but them.

May 21, 2011 10:09 AM
Rainmaker
259,389
Coral Gundlach
Century 21 Redwood Realty, Arlington Virginia

Tell 'em girl.  I like the Gods Green Earth clause, might make them wake up and pay attention.  Because as Geri pointed out above, they think it's not for them.   Or it doesn't hurt to ask, maybe?  Pretty please?

May 21, 2011 10:18 AM
Rainer
276,790
Kathryn Maguire
Serving Chesapeake, Norfolk, VA Beach
GreatNorfolkHomes.com (757) 560-0881

I have seen banks blink with REOs for repairs.  But not for short sales.  As-Is means as-is.  No matter how sweetly you ask!

May 21, 2011 10:49 AM
Ambassador
1,877,288
Chris Ann Cleland
Associate Broker, Northern VA
Long & Foster REALTORS®, Gainesville, VA

I wonder the same thing at times.  As-Is doesn't have some spectacular meaning that allows for repairs. 

May 21, 2011 11:13 AM
Rainmaker
278,343
Melanie Ross
Benicia CA & Vallejo CA Real Estate, 707-319-2828
Coldwell Banker Solano Pacific

Thank you for highlighting this. The education part up front is so important.  We rarely see the banks do anything.  We do have an addendum in on one of our short sales, the foundation is going, going and almost gone.  The bank is going to have to deal with this no matter what at some point in time as it drastically affects the price.  Luckily they (LBPS) is going to work on this with us.  But this is soooooo rare.

May 21, 2011 01:39 PM
Rainmaker
508,557
Mary Douglas
REALTOR, Red Feather Lakes, Colorado
United Country Ponderosa Realty

Hi Elizabeth, does this mean you don't want a counter after the inspection? LOL  It seems to me that those who don't understand "As is" should certainly understand after reading the verbiage in your addendum, even if you leave out "on God's green earth"!!!

May 21, 2011 03:46 PM
Show All Comments
Rainmaker
1,194,460

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