Pinetop White Mountain Blog

Good Afternoon Everyone,

I hope you all had a wonderful July 4th Holiday.  Here in the High Country we finally got some rain to dampen things up a bit but still not enough for the traditional Fireworks shows to be allowed.  In the aftermath of the Wallow, Wash, & Willow Forest Fires it was decided that the fun was not worth the risk.

Speaking of risk, buyers assume a lot of it when they decide to pursue a Bank Owned property.  No matter how many times it is said, it bears repeating, the Banks have all the power when you enter in to a transaction with a Bank.  Big or small the Bank Addendum you will be required to sign in order to buy that property is going to have many areas of concern that even the most skilled Attorney may have trouble spotting.  Whether by design or flaw, they contain traps that can ensnare a buyer in a situation where they could lose a good deal of money and still not get the property they want.  

These Bank Addendums vary greatly from Bank to Bank.  There is no uniformity in them and any protections afforded to the buyer by the State Laws & Statues are effectively eliminated.  The Banks accept no responsibility for the information the Buyer has been provided as to it's accuracy, and as a rule, they will not do any repairs.  Buyers assume the risk of having a good deal of money out for Inspections, Appraisal Fees, etc., only to find out that there are issues that either cannot be corrected or must be corrected before the lender will lend on the property. 

Then there are other things that can cost the Buyer.  Time frames that conflict, dates and times when a buyer must do something with no such requirement on the Bank's side.  The Buyer might find that even though they have complied with their requirements in the Addendum and have  given notice of something that is disapproved in a timely manner, the Bank doesn't respond.  What happens then?  It is hard to tell, but you better be sure you read that Bank Addendum carefully because you might find that there was a deadline in there for you the buyer to take some action or your Earnest Money Deposit might be at risk. 

My point is to help you be aware that these transactions contain risks that can result in serious consequences for a Buyer.  Many Buyers are just not prepared to jump through the hoops that the Banks expect them to.  These Addendums were written by some of the sharpest Attorney's in the country with one purpose in mind, to force to the Buyer to play by the Bank's rules or get out of the game.  The Banks only care about getting that property sold as quickly as possible, at the best price they can get, and with the least amount of hassle.  If the buyer can't move quickly or wants to haggle, they would just as soon that buyer went away. They are not fair and they don't care, it is as simple as that!

So when you are thinking that you want a "Deal" and a Bank Owned is  the way to get it.  You might want to stop and weigh the risks against the price and then decide.  You might find that paying a little more to work with a real human being might be worth it.  Remember, there are conventional sellers out there who have nice properties who also want to sell.  You might find you can get just as good a "Deal" with someone who truly wants to sell and isn't just in the business of moving property no matter who they have to hurt to do it. 

Thanks for reading, until next time....

Sandra Paulow, Associate Broker, GRI, SFR  (928) 242-0300