Hello Mr/Mrs/Ms Buyer/Investor,
1) You MUST be pre-approved for a loan before shopping. The banks who own the home will not consider your offer without some demonstration of ability to close.
2) If you are paying cash, you MUST show proof that you have the cash. Get a letter signed by your banks branch manager on the bank letterhead attesting that you have available funds.
3) If you are getting your cash from a home equity loan on a current residence, you are not paying cash.
4) The listing agent has generally suggested a list price taking into consideration the condition of the home. This value has nothing to do with what the former borrower owed on the loan.
5) Do not be shocked if the bank rejects or just plain ignores your offer of 75% of list price.
6) Want to be taken seriously on your offer? Do not expect to buy a bank owned home and ask for remodeling allowances and non-lender repairs to be made.
7) Need to sell your current residence first? Do not get emotionally attached to a bank owned home then.
The banks generally are not interested in contingency sales. In the current real estate climate those contingencies are not worth counting on.
8) Expect to have a very short window of opportunity to conduct home inspections. Buyer will have to pay for all inspections at time of service. If the home is winterized, expect that for the majority of homes for the buyer to pay for re-winterizing.
9) Yes there may be and probably are condition issues that are undetected until after closing. That is why there are several pages of disclosures and "As-is" disclaimers with the 23 page bank addendums.
10) Based on the results of the inspection, the buyer will not be able to get any repairs done to the property prior to closing. Although they may agree to lender required repairs.
11) If the bank chooses to make some lender required repairs, they will generally want to hire their own licensed, insured contractors who will sign a lien waiver.
12) Do NOT ask to move your stuff into even the garage of the home until funded and recorded. There are legal "Possession" and liability reasons why the buyer is never granted access to the property.
13) If you are the former Borrower or related to the former Borrower, the banks generally do not want you to take advantage of them and sell you the home back at a reduced price.
14) Initial Earnest Money deposit may be as much as 3% of purchase price. At least $500 minimum depending on the bank.
15) NOW FOR THE GOOD NEWS!! BANK OWNED HOMES ARE BARGAIN PRICED NOW. DO NOT MISS THIS GREAT OPPORTUNITY TO SAVE A BUNDLE.