Real estate agreements are often made from "standard" forms from a printer. You can add to, delete, or change any part simply by negotiating for it. See a buyers broker or a real estate lawyer if you are unfamiliar with these contracts or the negotiation process.
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This is a very weird clause. In Washington, there are standard forms for purchasing and selling real property (REPSA) and I've never seen this language. There is a document called form 17 wherein the seller has to disclose what they know about the property. I strongly suggest you spend the money for a consult with a local real estate attorney, there is too much at stake to rely on advice from the internet! Elizabeth Powell
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In theory, a contract is between two or more persons (or entities). They each can propose and negotiate the terms of the agreement.
You have the right to ask the seller to delete or change the clause in your post. However, if you are dealing with a bank or other business entity, it is unlikely that you will get the bank or business entity to change the "standard" terms of its preprinted contract.
If you do not agree to the terms, the bank will simply move on to the next buyer.
The clause is making clear that buying a foreclosed property is risky for the buyer. There is always the chance that the property is worth much less than what the buyer pays.
You should get inspectors and specialists to check the property before completing the deal to make sure you know what you buying.