Foreclosed property for sale by a bank fails inspections, what now?

My husband and I are interested in putting in an offer for a property in Buffalo, NY that was foreclosed and is now for sale. The Village requires an inspection of plumbing, electrical etc to issue a Certificate of Compliance to bring to closing. My question is, if it fails inspection, what happens then? Does the bank have to bring it up to code since they are in possession of the property? If we include in our contract that our offer is only valid if we pass inspection, could we offer less and still close and then fix the problems once we own the house?Foreclosed property for sale by a bank fails inspections, what now?
Is the property offered for sale, ';as is, where is';? If so, you accept any problems the property may have, including possibly having to pay outstanding bills associated with it, such as water, sewer, property taxes and so on.





First, In any property negotiation, you can offer whatever you like as a potential buyer. There are no ';rules';, except that the seller may or may not accept it and is free to tell you to go take a hike if they don't like the offer. You could try making the offer with the condition that the property be brought up to code and the bank is free to accept it or reject it. The only problem with that is that you will delay the process for yourself and if someone comes along with a better offer, in this case, someone willing to buy the property and deal with the deficits themselves, the seller will go with them and you will lose the property.





I sense in your question that you think there may be some law that forces sellers to fix whatever property they are trying to sell. Nope. No such law.





Each area is different. I am not sure why your local municipality would get involved in stopping a real estate closing. I have never heard of a local government policing real estate closings. You must be talking about what the bank requires. Perhaps you have phrased it incorrectly. Do you mean, instead, that you want to finance this purchase and the bank wants you to get a certificate of compliance from the Village before they'll give you the mortgage? In that case, perhaps your bank will add an escrow account of some kind to fix the problems with the property in lieu of getting a certificate of compliance. If it's a problem with financing, I suspect you could get around it by buying the property for cash, if you have the resources.





The direct answer to the last question, ';if we include that our offer is valid only if we pass inspection ....'; the answer is obvious. If you make that a condition of closing, the repairs have to be done before the closing, period. That's what you ask for, that's what you get. But I am wondering if you are in fact asking the correct questions.





In any case, don't be afraid of repairs. I buy and sell houses with no functioning heating systems, broken pipes and much more. You just pay to have them fixed and quickly get your money back when you sell or rent the newly-renovated property.Foreclosed property for sale by a bank fails inspections, what now?
Anything is possible after the bank has taken it back. The bank is the owner. They need to get it off their books. Some of the time they will sell as is and will not entertain any sort of request for repairs or a credit. The price should reflect the present condition. In other cases the bank will agree to make specific repairs or credit some of the purchase price.





I have purchased a number of similar properties and it really comes down to what the buyer and seller agree. Some banks will say no but later become more flexible as to repairs. You might prefer to get a credit or price reduction if you want to control how the repairs are completed.





If you are buying a home that is run down assume the next lender will not offer a loan on the property until the repairs are already completed and signed off by the inspector. A bit of chicken and egg if you do not have private funds.
this is a very typical negotiating point. Inspection failures are always a topic between buyer and seller. The bank is likely to offer you credits off the price of the house based on the fair market value of the cost of repair. Then the repair becomes your headache. Remember the house is mortgaged for it's purchase price, not it's potential value after the defects are repaired. This means you will have to have sufficient funds on hand to correct the inspection issues. This is esspecially true if any of the repair items will prevent you from getting a 'certificate of occupancy' from the city. Buffalo may call it something different, but you should look into any repair criteria the city may have as mandatory before you move in.
All boils down to what the rules are in your area. If the property has to be brought up to code before selling it, it will be the bank's business to do so. If not, and you are willing to do the necessary work, you could put in a lower bid to reflect the needed repairs. Best of luck to you.
When you buy in foreclosure you buy ';as is';. It probably stated that in the foreclosure notice in the paper assuming that this is a sale on the court house steps. Your area may handle sales differently - say the bank takes ownership and resells it, then you could make your offer with the condition that it passes inspection. People in foreclosure can sometimes be quite destructive before leaving.
You can ask the bank to fix the problems or you can try to reduce your offer and fix problems on your own after the closing. You may want to check with the city about the Certification or Compliance. I do not have much experience with that but you should be able to fix on your own.