Wells Fargo Q&A

Wells Fargo Q&A

   There are some distinct differences between a traditional home purchase and that of a Wells Fargo/Premier Asset Services (PAS) home. Below you will find the most commonly asked questions home buyers like yourself will need to know and understand before you begin the home search.

PAS Owned Home Buying Process:

Can I do a home inspection on a PAS home I am considering purchasing?

Yes. In most all PAS transactions, the buyer is allowed to conduct all customary inspections within a specific inspection contingency timeline.

In traditional purchases, the contract allows for a 10day home inspection. When purchasing a PAS property, the home inspection period is changed to 7 days from the date the seller signs the contract. If you think you need more than 7 days to complete your inspections, make sure you talk to the listing agent right away. In some cases, the asset manager will grant an extension, for special circumstances only.

What does “AS-IS” mean?

All bank owned homes come with an “AS-IS” disclosure. Because the home has never been occupied by the current owner, in this case PAS, they can not provide you with the customary disclosures you would receive if you purchased a home from Mr. and Mrs. Smith. The banks take a position of “AS-IS” as a matter of liability. The “AS-IS” disclosure is put in place so you, as the buyer, understand you will be purchasing the home, in most cases, without any repairs being done by the seller. Nor will there be any disclosures about the property condition made by the current seller (PAS).

If during your home inspection you find the condition of the home is not acceptable to you, then you may exercise your right to cancel the contract and your earnest money will be returned 100%.

What if my FHA/VA appraisal requires repairs?

If your appraiser finds repairs that must be done as a condition for your loan to be approved, then you will need to contact the listing agent right away. PAS will require a copy of the appraisal and it will depend on the type of repairs and the cost to complete the repairs before PAS will agree to do any work to the house. You are better off not writing an offer on a house that will require major FHA/VA appraisal repairs. If they are minor repairs PAS may be more inclined to agree, however, keep in mind, this is case-by-case and could vary from property to property.

When can I make an offer on a PAS home?

PAS has their own set of rules for their properties. During the first 7 days, PAS will not review any offers made on the property. When the home has been on the market, 8 to 12 days, they will consider offers made by owner-occupant & NSP purchasers only. After the property has been on the market for 13 days or longer, PAS will consider offers from non-owner occupant purchasers. A non-owner occupant by definition is a purchaser who does not plan to occupy the property as their full time, primary residence. This includes second home buyers, any trust purchases, special entities who will hold title and all investors.

I have heard I have to sign special Bank Addendums?

Yes, all PAS properties will require you, as the buyer, to sign their purchase addendums. This document does not replace the Arizona Department of Real Estate purchase agreement, however, it can alter or change the terms of your original offer.

When your offer is accepted and terms have been agreed to, PAS will send you (or your real estate consultant) the bank addendums to sign. This document will reflect all the terms you have agreed to. Make sure you read this document and proof for any inaccuracies or spelling mistakes. If you are asking for any special concessions or closing costs, please make sure you read section 6 of the PAS addendum thoroughly. If you find there are mistakes, then you need to address them with the listing agent right away. Any changes must be made now, not during the escrow period.

The PAS addendums will also include a buyer identity statement. Some buyers may not feel comfortable providing this information to the bank however it is a requirement for the paperwork. If you are making an offer through an LLC or a special entity name, PAS will also require you to provide your company’s tax ID number. Unfortunately, not agreeing to sign/complete the paperwork will only cause your offer to be rejected or canceled. There are never any exceptions and this is a must when purchasing a PAS home.

At any point during the negotiation process the asset manager may request your social security number. To prevent fraudulent transactions, PAS may at their sole discretion run a background check to ensure you are who you say you are and to verify that you are not related to any Wellsfargo employees. Please understand we do everything we can to protect the identity of any person we work with and your social security number will not be given to anyone else besides the asset manager who is handling the file.

How long do I have to review and sign the bank addendums?

In most cases, the sooner you sign and return the bank addendums to the listing agent, the better. The listing agent should give you a deadline in their instructions; however, a good rule of thumb is no later than 24 hours. If you are unable to meet the deadline for some reason, make sure you tell the listing agent. Otherwise, PAS has the right to cancel the offer and move onto the next buyer.

What is a pre-diem?

A per-diem is a $50.00 daily fine that PAS may charge if the closing date should be delayed for any reason past the agreed upon date.

If you require an extension during the escrow process, make sure you ask for it before your scheduled closing date. PAS understands that things happen during the process which can cause a delay. However, repeated extension requests can cause an issue and the asset manager will elect to charge you the per diem if they wish. Talk to your loan officer prior to agreeing to a closing date in writing to make sure they can get the loan paperwork completed in the time allowed.

How long does it take to get a response from PAS?

If you (or your real estate consultant) have submitted an offer with all the proper documentation as required by the listing agent, most offers will be responded to within 48 hours. If you (or your real estate consultant) fail to follow the instructions given by the listing agent, this could prevent your offer from being submitted to PAS in a timely manner.

If you are making an offer through an LLC or a special entity name, PAS will require a copy of the articles of incorporation for the company. This is a requirement, no exceptions. Any delay in providing this document may cause your offer to be rejected. Make sure you submit the articles of incorporation with your original paperwork.

PAS will never counter your offer in writing. This is vastly different than a traditional purchase. The listing agent will most likely email you (or your real estate consultant), which will be the next best thing to “in writing”.

What happens if there are multiple offers?

If there are multiple offers on the property, you will be asked to provide your “highest and best” offer. If multiple offers are received, it could take several days before you hear a response back. If you do not get your offer accepted, you may have the option to remain in a “back up” position. If anything should happen to the accepted offer, your offer could move into first position. Your real estate consultant can guide you through this process.

It is important to know that when PAS counters an offer in their online system (also known as a portal) they will not look at any other offers until that buyer has had a fair chance to review the terms of the counter and make a decision. If the buyer counters the counter or rejects, then PAS will open the negotiations back up to all interested parties.

What if I decide I want to add or remove someone from the contract paperwork

Unfortunately, you can not add or change any of the parties to the contract/bank addendums once it has been approved and signed by PAS. A change like this will require the contract to be canceled and resubmitted for approval. You will also be required to submit a new Pre-Qualification form with all qualifying parties if the change impacts the loan in any way.

How much Earnest Money do I need? Will they take a personal check?

Customary earnest money deposits are 1% of the purchase price. If you are making an offer on a home listed for less than $100,000, you should be prepared to make a deposit of at least $1,000. In some cases, PAS may counter your offer with a specific dollar amount they want as earnest money. All earnest money deposits must be in one of the following forms: money order, cashier’s check or wired directly to the title company.

Initially, when you make an offer, you may use a personal check to submit with your required paperwork, unless the listing agent has requested something different. Once your offer is accepted you will need to be prepared to get a money order or cashier’s check payable to the correct title company. If you plan to wire the earnest money deposit, you will need to get the wiring instructions from the title company to make sure your earnest money is applied to the correct escrow. Earnest money must be deposited right away, unless otherwise instructed by the listing agent.

I haven’t decided who I want to use for my loan, can I still make an offer on PAS property?

Although shopping around for a home loan is always a good idea, you will want to have your loan approval in hand before making an offer on any home. Because PAS homes are affiliated with Wellsfargo, they require you to speak to a Wellsfargo Home Mortgage consultant. Most listing agents will disclose this requirement in the MLS information so make sure you know ahead of time if this is a requirement for your offer to be presented. Depending on the asset manager, they may not even consider your offer without a Pre-Qualification Form from a Wellsfargo Home Mortgage.

What if I have cash?

If you are planning to pay cash for the property, you will need to provide a copy of your bank statement or an official document which supports the offer you are making in available funds. The “proof of funds” must be in your name (or the name of the person/company on the contract) and it must be dated within the last 30 days. In some cases, an exception can be made if you are pulling money from an investment or account that only provides statements once a quarter. Talk to your real estate consultant about this for more information.

Can I choose my own title company?

The short answer is yes, however there are details you need to be aware of so you can fully understand the process. All PAS listings have been assigned to a specific title company at the time the foreclosure happens. This is to help discover any title issues prior to the home being offered for sale. Sometimes these title companies can be located in another state. PAS agrees to pay for the customary “seller” closing costs, which includes an Owner’s Title Policy.

If you choose to use a different title company other than the seller’s choice and the seller closing costs are more than they would be at the seller’s title company, then those costs will have to be paid by the buyer. The seller will only pay for an Owner’s Title Policy if closing occurs at the Seller’s choice of title companies and the Owner’s Policy is ordered through that title company.

Although you may have your reasons for using your own title company, and certainly that is your right according the RESPA guidelines, we highly recommend you stick with who PAS has selected. A lot of issues can arise during the escrow process and the last thing you want to do is add more stress by working with a title company who is not familiar with the PAS process.

Will the seller provide a home warranty?

If you want PAS to provide you a home warranty at the time of closing, you need to make sure your contract reflects the request on page 6 of the Arizona Residential Purchase Contract. PAS has an outside agreement with American Home Shield warranty company so if they agree to pay for a warranty, it will be issued through their preferred vendor. PAS does not limit who can ask for a home warranty so long as it is agreed to during the negotiations.

What if I want the seller to pay my closing costs?

Before you decide to ask the seller for a concession for closing costs, make sure you ask your loan officer how it will impact your loan. Most FHA/VA guidelines have a cap on how much you are allowed to receive as a concession.

PAS does not have a set rule on how they handle seller paid concessions, however it must be presented in your initial offer. This means that even investors, cash buyers and second home owners could be eligible for closing cost assistance. Any concessions will be agreed to during the negotiations.

Homeowner Association transfer and disclosure fees are a part of what the seller (PAS) considers buyer side closing costs. If you are asking for 3% concession, you need to take into consideration the cost of the HOA transfer and disclosure fees. If you need to ask for more concessions to include the HOA, better to do it at the time of your initial offer than try to re-negotiation later. *Please see section on HOA for more details*

The property I am looking at has a homeowner association. How does that work with an REO home?

Some REO companies do not recognize the HOA Condominium/Planned Community Addendum that is used in traditional sales to disclose the HOA information. PAS is one of those asset companies. Depending on who the investor or asset manager is will determine whether or not they sign and acknowledge the Addendum, if there is an HOA in the subdivision where the home is located. If they acknowledge the HOA addendum, they will only pay costs related to the HOA if they are agreed to during the negotiations. If there is an upfront fee during the escrow process, the buyer will be required to pay this expense.

When a property is foreclosed on, PAS assumes the monthly, quarterly or annual cost of the HOA expenses from the date they recover the property. If there are any outstanding assessments, PAS, may or may not pay those fees. Most HOA Companies will try to collect as much as possible of the previous debt owed on the property. PAS will, at their discretion, decide how much of these fees they will pay. Special assessments for community or property improvements may be prorated and assumed by the new buyer.

If there is a large amount of back HOA dues accrued from a special assessment, you may want to ask the listing agent how those fees will be handled at the time of closing. Condo and townhouse projects tend to be more of an issue than single family homes. Again, it is important to remember that the HOA Company will try to collect as much as possible. This does not mean they are entitled to collect this debt. Make sure you ask your real estate consultant for more information if you are considering purchasing a home with an HOA.

Contact Information

Photo of Nate Martinez Real Estate
Nate Martinez
RE/MAX Professionals
20241 North 67th Avenue, Suite A1
Glendale AZ 85308
Fax: 602-532-7352

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