making offer subject to interior inspection

I have seen a couple of homes in the bay area (California) that can not be viewed.  My understanding is that the way to make an offer blind on these homes is to do it "subject to interior Inspection".  

What C.A.R form is used to do this?  I looked over the Residential Purchase Agreement and can't find anything that would make the offer subject to interior inspection.  
  • March 13 2012 - San Jose
  • 1
    1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.

Answers (15)

Best Answer

Profile picture for Sandykayhomes
Hello David and welcome to the short sale market!

Basically to buy a short sale: the seller has to be willing and the bank has to be willing and you have to have an agent that understands and is in some level of control over the process.
In more than a few cases the seller is not at all willing to give up their situation where they are no longer paying rent or a mortgage and living for free. They will not make it easy to sell the home and will prevent viewings. Until the seller is resigned to moving they may use the short sale process to keep you in the short sale division up until the closing date and then just refuse to sign the closing papers. You have wasted a lot of time and money.

Regarding making an offer -- it is completely pointless to write "subject to interior inspection" since when you make the offer you are not putting up any money. If this is what the listing agent wants humor him/her by adding that phrase to page 4 item 11D of the CAR form. It is already built into the purchase concept as  you have already checked the box 14B1 which provides you with a certain number of days  to view the home and do inspections to determine condition.

If the seller signs your offer and won't grant you access to the house he is unlikely to be cooperative in the short sale so beware of the whole deal. What finally happens in these is they get their auction notice and that spurs them into action. Remember you risk nothing by putting in an offer because you have not put up any money.
  • March 13 2012
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for Sandykayhomes
One more thing to add. All contracts are subject to scrutiny and when lawyers get involved your deposit could dwindle quickly.

In the short sale contract (SSA) you technically are obligated to provide a deposit to hold the property in contract for 45 days (this can be changed) while the listing agent works with the bank to arrive at the BPO -- the amount of money the bank wants to close the deal. Some agents take the deposit -- others do not. They do not want the buyer to walk while they are negotiating with the bank if they are GOOD agents working with reputable sellers wanting to do a short sale


Many agents are listing short sales with sellers that are still going through the 4 stage process put into law this last year of trying to keep the home. Short sale is stage 4 before foreclosure. Stages 1-3 can take as long as two years

Do not give any deposit to an agent that 1) does not have a brokers trust account, 2) does not have an office with a broker  3) preferably does not work locally in the area of the short sale
  • June 23 2013
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Unfortunately we have the same issues in S. Florida. Thanks for the information all. Great reads
  • June 23 2013
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for manestate
There is no separate CAR form for "subject to inspection". It is an empirical expression which means: the offer was made without visiting the property and maybe withdrawn after the visit. The purchase agreement has already provision for that and no other form is required. I frequently do that with "online offer" on my website [hotlink removed by Zillow Moderator]. If the offer is withdrawn, the agent representing the buyer will simply send a cancellation of contract: CAR form CC invoking paragraph  14.B.1
  • June 23 2013
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for sunnyview
Not the first answer like that. Some apparently feel that if you have question you should contract with an agent first and then ask them.

I feel differently and think that many ask in this forum because they are still trying to find the right agent, want a different point of view or already have an agent that is not a good fit.
  • June 05 2012
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for hpvanc
David Barr

In this case the OP is a Realtor®, see the light gray Agent tag next to the name.  If you click on the profile, you would see that the OP works with Apex Realty in San Jose, CA.  I guess sometimes even Realtors® solicit advice on open forums when they are trying to find answers.  Is there something wrong with that?
  • June 05 2012
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

I always am amused when we offer free advice to someone who has no interest in using an agent, but wants an agent's expertise and advice for free.
  • June 05 2012
  • 4Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for aracz
Hi,

Many would add the "subject to buyers visual inspection" or similar wording.

All the best,

Arpad


  • May 17 2012
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Sandy has given a good answer here, but I wanted to offer a few more tidbits.

First, my experience has been a bit different from Sandy. While short sales will often require an appointment and frequently the sellers are not pleased with the situation, I have not had one where the seller refused to allow access prior to making an offer. After all, in most cases, the seller has had to start the short sale process and are hoping this will limit the downside of a full blown foreclosure. In the cases where sellers are reluctant to sell it is after a long drawn out period where folks have come through the home and none of them have proven to be solid buyers. Maybe even after an offer has failed because the buyers financing has not come through.

I see this far more with homes occupied by a tenant.

The problem I have with these arrangements is that it forces you to assume a great deal and put an offer number out there before seeing the interior condition of the property. If it is as bad as it is likely to be, you may find yourself having to try and get the offer amount reduced.

Keep in mind that you are still totally protected. You have your 14 day windows of inspections to extract yourself from the deal with no harm to you, but I much prefer to make an offer based on a decent walk through of the property.

In the few cases where I come across a listing that wants you to make an offer that is contingent on an interior look, I usually try and push back to get a look inside before making the offer. That works more than half the time. As I mentioned before, when you find yourself in these situations, it might be as a result of previous frustrations from unqualified buyers. Have your agent share your pre-qualifications with the listing agent to let them know you are a serious buyer who is ready and able to buy.

R
  • March 14 2012
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for LAUREL JAQUES
When a property is listed "subject to inspection", it doesn't necessarily mean that it is a short sale. Often tenant occupied properties are listed "subject to inspection" so that the tenant will not be disturbed with endless showings. When the property is a multi-family residential property, many times you will be able to view only one unit, and the other are "subject to inspection" and will be viewable only after a contract is negotiated.
  • March 13 2012
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

On Page 5 of the RPA-CA (Revised 4/10) Paragraph 14.B.(1) if left unchecked automatically defaults by giving the Buyer a 17 day Contingency after acceptance of offer to perform inspections.
  • March 13 2012
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for Sandykayhomes
Page 4 - 11 of the CAR form is seller disclosures, advisories and OTHER TERMS -- subject to inspection falls under that probably best

14b1 is a contingency of sale -- if you find a condition which the seller will not remedy the best thing to do is request a cancellation --
if the seller will not let you inspect he is already in violation of the contract he signed

Also you are not required to put money in escrow until the 3rd day after the seller has accepted and if you fill out the short sale addendum correctly - not until the third day after the bank has accepted. In fact the contract is only subject to the bank approval and not until then is it a contract that can be closed. The key is when you put up the money in escrow -- you wouldn't want to put money in escrow and then have a short seller skip town after he has torn out all the appliances for example -- you would have a hard time getting your money back

The point here is don't put up any money until you are sure hat the agent is in control of the sale and the seller is actually being cooperative
  • March 13 2012
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Thanks Sandy.  I didn't realize that 14b1 allowed for cancellation of the purchase agreement even if the inspector doesn't find anything.  I thought it only applied to the right to cancel if problems with the house are found.

P.S. did you really mean to say that I can add that phrase to item 11D on the CAR from?  That is the buyer indemnity clause and it doesn't have a Section D
  • March 13 2012
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

I'm not in the process of buying one right now.  I just want to do some independent reading in-case the opportunity arises.  Any advice on how the Residential Purchase Agreement for California is filled out to make the offer "subject to interior inspection" would be appreciated.

Thanks,
David
  • March 13 2012
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for Ofe Polack
You will be in better shape if you discuss this situation with a Realtor, after all the seller usually pays the commission.  Good luck!
  • March 13 2012
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.