Posted by Rick Harmon on June 05, 2010 at 23:45:30:
You may have answered your own question.
Lender (bank) made a loan secured by real property belonging to borrower. Bank did not catch the possible septic and encroachment issues at the time the loan was made or made two separate loans encumbering the respective properties.
They foreclosed one, the one that you’re in escrow to buy, and are presumably selling it to you below market, or you’re a retail buyer who is in escrow at too high a price in the first place…I don’t know which one you are.
What I will presume is that the lender selling this property has, or will ask, you to buy this property as-is.
You’re the buyer so it’s up to you to perform your due diligence prior to your money “going hard.”
As I see it, if these issues were disclosed to you up front, then either fish or cut bait. If not and only now discovered, then decide what they’re worth to you and start pounding on the seller, being prepared to walk, if need be. That’s what negotiation is all about.
If you capitulate, are you willing to deal with the ramifications later at the price/terms negotiated should the issue with the former owner/neighbor?