In this era of more people buying homes in foreclosure and dealing with a third party (the one that holds the mortgage) there can be unexpected issues that will leave the buyer scratching their heads wondering if the home really was for sale. This was my experience.
About 20 years ago I found this totally super Victorian home that was being sold by a bank. The owners had both died and the bank wanted their money out of it. The home was supposed to be sold "as is" and with the furnishings. When I saw it the personal items were gone and the furniture left was all antiques. The kitchen, real Victorian, had the old huge white sink, with no wall cabinets. Storage and work surfaces were all individual pieces of furniture, hutches, that were backed up to the walls. There was even a dry sink.
The house itself was large, it had four bedrooms and three bathrooms that had old hexagon white and blue tiles on the floor. The house was on an over-sized lot that contained a 3 car barn-like garage and an additional building which was used as a greenhouse. The greenhouse had potting beds and a wall of windows that could be opened with a chain.
I think I loved the furnishings more than the house because the house had major structural damage which would take a bit of money to correct. The worst was a roof leak that had been going on for about 5 years. By the time I saw the house there was severe damage from missing roofing material that had gotten into one side of the home from the third flood down. I guessed that much of that side, including windows and the structural beams holding up that wall would need replacement.
I had the place inspected by a private firm and also got my bank to do an inspection. I took the two inspections and presented them with my offer to buy. The amount that I offered was a bit more than what the inspector and my bank thought it was worth. The selling bank refused the offer. I was shocked. I had submitted documents that proved that my offer was more than the property was worth. Logically they would not receive more in a foreclosure sale. I could not understand why my offer was being rejected.
The seller bank held firm to their price and urged me to look at the property one more time since they had done some clean up on it. What I found was that the bank's "cleaning up" meant that a dumpster was in the driveway and ALL I mean every piece of furniture that was not nailed to the floor (including the kitchen hutches) was tossed in the dumpster like so much trash. I contacted my Realtor to tell the bank that they had just tossed away some very valuable furnishings and that "no" I was not increasing my offer especially now. They told my Realtor that unless I wanted to offer full price, not to even bother them, the bank refused any negotiations.
The house eventually went into foreclosure and was picked up for a song by a local contractor. This same contractor has significant business accounts with the seller bank and had this bank doing loans for the homes he built. Winning bid contractor tore the house, garage, greenhouse down and built a 3 story edge-to-edge McMansion. This was sold to the seller Bank's president, who got a real deal in the price.
Moral of the story is that there are some times when a seller will not accept a reasonable offer. When dealing with a seller who is a person the potential buyer might be able to negotiate with that seller and compromise. When dealing with a third party financial institution the potential buyer is up against a bureaucracy that may have its own agenda and does not always use logic to resolve issues.
Diana Brodman Summers is a real estate attorney in the Chicago area and author of "How to Buy Your First Home". Read her weekly
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