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Updated about 8 years ago on . Most recent reply

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Dewain J.
  • Investor
  • Philadelphia, PA
27
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87
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Making Offers on "As Is" Properties with contingencies?

Dewain J.
  • Investor
  • Philadelphia, PA
Posted

Good Morning BP. Quick Question. 

I've been purchasing properties for the past year and waiving all the contingencies on the agreement of sale. I hear people leave themselves different caveats in the contract that could allow them to back out of deals without losing earnest money and things like that. I'm just curious for those who do this, what kind of things are they specifying as a deal breaker? Since the properties are sold as is, what are you finding inspections that leads to you backing out? 

I often hear people use this as a way to send out multiple offers, without having to run around property to property, getting the property under contract, and then doing their due diligence. Is that a viable/ethical approach? 

Most Popular Reply

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James Wise#3 All Forums Contributor
  • Real Estate Broker
  • Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH
19,523
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28,423
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James Wise#3 All Forums Contributor
  • Real Estate Broker
  • Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH
Replied
Originally posted by @Dewain J.:

Good Morning BP. Quick Question. 

I've been purchasing properties for the past year and waiving all the contingencies on the agreement of sale. I hear people leave themselves different caveats in the contract that could allow them to back out of deals without losing earnest money and things like that. I'm just curious for those who do this, what kind of things are they specifying as a deal breaker? Since the properties are sold as is, what are you finding inspections that leads to you backing out? 

I often hear people use this as a way to send out multiple offers, without having to run around property to property, getting the property under contract, and then doing their due diligence. Is that a viable/ethical approach? 

 If it's an incredibly aggressively priced property with lots of competition you can attempt to write whatever you want in the contract, that doesn't mean the seller is going to accept it. I assume that is the type of the property you are going after as the properties that are sold "as-is" always need lots of work, which is where the opportunity lies, which of course leads to more competition.

If I see a well priced property I want to buy I make a clean offer. No questions asked, because I want to make sure I win the bid. Likewise when I am selling a property for a client that I know is going to have lots of action on it we either reject or counter anyone who puts any type of contingency in their offer as there will be no questions asked cash offers coming in. If the property is not as hot then of course you have to deal with what is going to come in....In short it is all relative to the particular deal.

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