Q: We were trying to buy a home that is owned by a credit union. We had a home inspection done and found that the furnace, roof and water heater all need to be replaced as soon as possible. The credit union did not agree to pay for any of the repairs and we walked away from the house, which we hated to do. Wasn’t it reasonable to think that the seller should cover at least half of these expenses if not all of the costs?

A: Reasonable? Sure. But reason matters not when dealing with a bank or other institution selling a foreclosed home.

Banks are not people. They do not negotiate with the same types of motivation, flexibility, logic or reason that individual people do. Rather, they have a set of guidelines by which they operate. And the standard guideline for buying a bank- or credit union-owned property is that you take it in as-is condition or not at all.

So, from that perspective, maybe it wasn’t reasonable to expect the seller to chip in for the repairs.

Did you feel that you were paying full price for the property? Or did you believe you were paying a discounted price because it was a foreclosure? An additional factor to take into account in analyzing what expectations were reasonable and/or whether walking away was the appropriate response is the price you were getting the place for.

Part of the discount factor buyers stand to gain from buying a foreclosure is that foreclosure buyers take on the responsibility for repairs that individual sellers might have contributed to, because the bank has no intention of helping out except where the needed repairs pose a dire health and safety threat.

Another issue I’d like you to rethink on the next go-round is that of the relativity of the concept of when an appliance "needs" to be replaced. Strictly speaking, an item needs to be replaced only if it’s totally nonfunctional; this is a different analysis than a smart homeowner would apply during the course of regular and prudent home maintenance. Were the items you mention just not working? Or were the water heater and furnace functioning, but of an age and state where the inspector believed they weren’t long for this world?

If appliances are functioning at the time escrow closes, their eventual repair or replacement — when they do break down — might be eligible for coverage under a home warranty. For this reason, many banks and institutional sellers that won’t pitch in for repairs will pay for home-warranty coverage so that the buyer can have systems repaired or replacement if and when they break following closing. This serves both buyer and seller by allowing them to buy and sell, respectively, without these sorts of things killing the deal.

One important note: Most home warranties will not pay for an entire roof replacement. However, had you known that the roof was the only item you were going to be on the hook for, that single item might not have risen to the level of concern that prompted you to back out of the deal.

Next time, educate yourself about what you can expect when you do a deal with the bank. And make sure that you are working with a real estate agent who is knowledgeable about this sort of transaction — he or she can help you manage your expectations and make decisions in what is probably a very David vs. Goliath-esque experience for you.

Tara-Nicholle Nelson is author of "The Savvy Woman’s Homebuying Handbook" and "Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions." Ask her a real estate question online or visit her Web site, www.rethinkrealestate.com.


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