It’s no secret that if you’re looking to buy a foreclosed home in Minnesota right now, you’ll have plenty to choose from. We have a record-high number of them on the market right now with a wide range of prices and conditions to choose from. There are even more than a dozen in the $1,000,000 plus range around the Twin Cities.
Buying these foreclosed properties involves some more paperwork than a regular purchase and you will find a couple particular differences:
- “AS IS” addendum – most banks require this piece of paperwork notating that the home is sold as it is. They will not make any improvements, updates or repairs, nor are they responsible for the condition of the home. Which, if you think about it, makes sense. The
bank has never been there, never lived there, they have no way of knowing the condition of the property: if the toilet runs, or the basement gets wet during heavy rains. They also have no way of watching over the property to prevent vandalism – they’re just a bank.
- “Hold Harmless” – this is another common form required by banks. It says that they are not responsible for problems and complications of the home and that you will hold them harmless after the purchase. Again, this make sense too, as they will not know (and don’t pretend to) the specific conditions of the house.
- No arbitration agreement – in regular offers you have the choice to make regarding the potential of future disputes (if there ever were one). If you and the seller both sign an agreement (the ‘arbitration agreement’), it means in the case of a dispute you will hire an arbiter (instead of an attorney) and your statute of limitations is 2 years (instead of 7 with litigation). With bank offers, they will never allow an arbitration agreement.
- No guarantee on appliances – sound strange? Well, it’s actually normal for a bank to do that. Even if there are appliances when you view the unit, and the bank certainly doesn’t go out of its way to remove them. But they will usually require an acknowledgement that it is understood that those appliances may or may not be there at close.
There are other particulars that are expected or common for foreclosures and they are mostly around the bank covering its own arse. But if you are able to deal with their paperwork and delays and changing close dates, there are some seriously good deals to be had out there…
Call or email us if you have any questions about Buying Foreclosures – we are happy to help!
Direct Line: 612-644-5380
Email: [email protected]