I have had several requests through Skype and email asking to go into more detail about disclosures and REO (real estate owned) properties.
REO properties are properties that are owned by a lender, usually a bank that has failed to sell at the foreclosure auction. REO properties currently on the market do not have any disclosure (lead-based paint, property report, radon gas or mold disclosures).
When a buyer purchases an REO property (based on the terms of their contract), they are afforded time for due diligence. The purchaser would be allowed to perform inspections on the property and discover any potential issues that may affect the transaction.
Although many REO properties are sold “as-is”, major issues could be addressed. The seller may not offer a credit for minor repairs but major issues should be discussed as it could affect the buyer’s loan, purchase price and habitability among other things.
Every home inspector has different methods, so inquire as to what will be inspected, tools, and pricing. Furthermore, in some instances, the purchaser may opt to have a building analyst perform tests or an engineer to look at possible structural concerns. Inspections are at cost to the buyer, and paid for at time of inspection so inquire and decide the extent of services that are required for your specific situation.
Sherwin L. Sucaldito, REALTOR®
Member of The Institute of Luxury Home Marketing
Member of the Real Estate Buyer’s Agency Council, ABR
Certified Residential Property Manager, CRPM