Legal Question in Real Estate Law in California

Re: Purchase of Foreclosure and Buyers Rights

You may have some recourse, but not in the typical sense of a normal home sale. First, now that your home inspection has revealed these defects, you probably have the right to cancel the purchase (read your offer documentation), as the home is not acceptable to you. Alternatively, in a normal transaction you would go back to the Seller and say "fix these items, or credit me for the cost to repair them". Here, the bank may not be willing to negotiate price on the basis of the defects, as they have some protection from having to make certain disclosures regarding defects after a foreclosure pursuant to section 1102.2(c) of the Civil Code, and in fact have the ability to sell a home "as is". Your choice is either walk away, buy knowing these defects exist, or get some consideration from the bank for the defects.

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Re: Purchase of Foreclosure and Buyers Rights

Pursuant to your written agreement you probably have the right to cancel the transaction, but must do so within a specified time period. To be safe, you may want to cancel the purchase, and then try to negotiate a settlement on the safety issues. Also, if the bank has not formally accepted your offer, you should be able to rescind it before acceptance.