Buying REOs
Buying a foreclosure house (REO) can be risky. These houses are sold in "As-Is" condition, with no disclosures. The banks are not required to provide you with any information on the condition of the property. Since they have never lived there, they are exempt from disclosure requirements.
"As-Is" Condition
Even though the house is being sold "As-Is", buyers still need to know what condition a house is in prior to placing a bid. Buyers don't want to bid too high if there are problems with the house. If they bid too low, someone else might win the bid. In either case, the house may fall out of escrow during the contingency period based on the findings of a home inspection. If that happens, the house goes back on the market to wait for another round of bidding.
Reducing Bid Withdraws
To minimize withdrawn bids, many banks are now requiring potential buyers to obtain a home inspection before placing a bid. That means that each potential buyer has to hire a home inspector, pay the full inspection fee ($350 - $500), then place an informed bid. Only one person can win the bid, so the money spent on the inspections is gone. Those same bidders may have to pay full price for an inspection on another house.
Saving Everyone Time and Money
The San Diego Real Estate Inspection Co. is arranging pre-listing inspections with REO listing agents to help close the gap between a buyer's right to know, and the bank’s pre-bid inspection requirement. We inspect REO properties as an independent third party, and we are not paid by the banks. The inspections are impartial, detailed, complete inspection reports which are the same as you would receive if you were buying a house through a traditional sale. But potential buyers can purchase the report for only $99.
Win-Win
This is a best case scenario for all parties. The buyer gets an impartial home inspection and saves hundreds of dollars. The banks benefit by receiving bids from informed buyers who are less likely to back out of a purchase due to findings in a home inspection report. Buyers get what they pay for, and banks sell their houses faster.