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REO Repairs? It Never Hurts To Ask

When buying an REO property, the first thing that happens after your offer is accepted is, the bank makes you sign their addendum. The banks addendum often has terms and conditions that supersede the provisions set forth in the C.A.R. contract the original offer was presented on. For example, the bank usually shortens the contingency period from 17 to 10 days. One of the first things you notice as you read the addendum is the bank stating the home is being purchased ” As Is “, which is usually stated in a can’t miss manner. Often in bold face type. This leads many buyers and agents to the conclusion that the bank will not pay for any repairs at all.

This is not always the case.

A good example just happened to me this week. My clients were aware that the home was sold ” As Is ” and they knew that it was unlikely the bank would make any repairs. However, when we were doing our home inspection, it was revealed that a pipe in the wall above the kitchen sink had ruptured and water was leaking out of the light above the sink when we turned the water on. This was an issue because we were unable to finish our inspection of the plumbing due to the leak. I contacted the listing agent right away and filled him in on the situation. The next day the bank had a plumber at the property repairing the pipe so we could finish the inspection.

Another specious belief is that the bank won’t pay for a termite report or any termite repairs. Again, I have been involved in numerous transactions where the bank not only paid for a termite inspection, but also all the section 1 work that was uncovered.

The bottom line with banks is, usually, how much profit they will net at the end of the deal. As long as your offer is high enough, they will usually pay for Natural Hazard Disclosures, Home Warranties, Termite Reports, and Transfer Taxes. If you really put the screws to the bank and get a very low price, they probably won’t do anything at all. Every bank is different and every situation is unique. There really isn’t a general rule to follow in regards to buying an REO property.

I guess the lesson to be learned is, it never hurts to ask.

My name is Izzy Barden and I would love the opportunity to be your Realtor of choice in The Big Bear area. Please don’t hesitate to contact me with any questions or requests.

Izzy Barden


  1. This is great advice, Izzy! Thanks for sharing it. I’ve also had banks do roof repairs and anything else that is time-critical. Like your pipe example, they are not going to let the asset detriorate further, but to avoid more damage, they will make repairs.

    🙂 PS

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