Submit a question to our community and get an answer from real people.
Submit

If a buyer has been approved for a loan, does their lender require an inspection of the home even if it is sold "as is"?

i am selling my rental house "as is"..i have an potential buyer coming by to look..the realtor that i had when i bought the house i'm in is going to draw up the paperwork and her lawyer will do the closing (this is a favor to me, the house is not on the market),,i want everything done right..
i am not making any repairs, it is what it is...will there be ANY problems with that?
also, the tenants are in the house because i need the rent...is it o.k. to keep them in, although they have destroyed my rental house, while i'm trying to sell the house i am not an investor, just happened to end up with this house when i divorced and have been renting it out...i am totally new to the process of selling property.
what do i NOT say to these folks when they come by...they are property investors and want a house to fix and "flip" ... will be the only time i've ever done this and want to say and do the right things..i know i do not have to accept just any offer, but neither do i want to deter potential buyers.
and why would i have it inspected when i'm not going to fix anything?

Report as

Well, the inspection is both for you to make an educated decision of a good price for the home, and it's for them to make an educated decision about the purchase they're making. As flippers they're going to want to know exactly how much they're looking to spend. Honestly if the house was just beat up by the tenants, not neglected by you, it's going to be mostly cosmetic stuff rather than the "big" items like a sagging roof, a moving foundation, bad electrical, gas leaks, things like that. So even if you're selling as-is it's a good idea on their part to request an inspection as the term of the sale - even if they pay for the inspection, and even if they're not going to get you to fix anything. As investors they ARE going to want to haggle you down as low as possible, so keep that in mind.

It is OK to sell the house with current tenants, and you can also sell their lease agreement to the new owners if you want. It may be seen as a perk to the new owners if they can get a few month's rent out of the tenants before they start working on the house. If they don't seem interested, just evict the tenants a few days before the closing (and obviously keep their security deposit.)

Helpful (1) Fun Thanks for voting Comments (1)
Report as
thank you for your expertise...now i feel more prepared as to what to expect...it all makes sense!
Report as
Add a comment...

You don't have to have it inspected, but your buyers will probably will. It's only common sense, even with an "as is" house, for one to have it inspected before they buy. Too easy to hide serious structural damage, that the average buyer might not know what to look for. Plus if there are major issues, it will likely affect whether or not they offer, especially if they are trying to flip to make money, major repairs likely aren't in their budget.

Helpful (1) Fun Thanks for voting Comments (0)
Report as
Add a comment...

It only needs to be "inspected" by the buyer .. They may be required to have it appraised by their lender at their own expense. The condition of the house is what it is.

You can continue to keep your tenants Until closing oh the deal. You have to make sure to give them proper notice to vacate... Unless the new owner wants to let them stay and develop a landlord/tenant relationship with them themselves.

Helpful (1) Fun Thanks for voting Comments (1)
Report as
thanks! i'm beginning to get the big picture now...i worry so much, that i think everything is going to be a problem...i;m just starting this process, so now i'm not so nervous!
Report as
Add a comment...

The banks want to "ensure" that the loan is fully covered by the "real" value of the home/asset, it a liability issue.

Helpful (1) Fun Thanks for voting Comments (2)
Report as
i've gathered some great info asking this question! i appreciate your input...!!!!!
Report as
Keep in mind though that they may be getting an investment loan or home improvement loan. Standard mortgages only meet the "appraised" value of the home (which requires an appraisal, not an inspection) but with an investment loan they can exceed the current value of the home.
Report as
Add a comment...
Do you have an answer?
Answer this question...
Did you mean?
Login or Join the Community to answer