As everyone knows, we are seeing a lot more bank-owned properties on the market these days. For many people, the first thing that comes to mine regarding bank-owned properties is "bargain." That can be the case, but it's not always easy to complete the transaction. I am currently in the process of helping a client purchase a bank-owned condo, and after several weeks of being involved in the process, my client looked at me with frustration in her eyes and asked plaintively, "Is this normal?"
Giving her a short answer to that wasn't easy. There is no such thing as "normal" in reference to bank-owned properties. First, THEY tell YOU how much earnest money you're going to give them, and they may insist that you get prequalified with the lender of THEIR choice before they will even look at your offer. Then they present you with an intimidating stack of paperwork that appears to take away all your negotiating ability and give you lots more responsibility than most people are accustomed to in more traditional transactions. Then and ONLY then will they consider your offer. Maybe they'll get back to you in a timely fashion, and maybe they won't. It rarely has anything to do with the contract dates you write in your offer. More likely their answer will be scheduled around the business hours of their department, their work load, vacation schedules, and who knows what else. Maybe you won't get a response at all. If you are fortunate enough to get a response, it will most likely be a counter-offer, or maybe a notice that they have received multiple offers and they will entertain all highest and best offers from all parties at some future date. Once you get an accepted contract, it will probably be a verbal acceptance at first, and you'll have to wait as long as it takes to receive a copy of the executed contract before you can set about scheduling inspections. On the other hand, they will definately hold you to the closing date you wrote in your offer, no matter that THEIR processes have slowed the whole progression down. Too bad if that inconveniences you, but if you take longer than you said you would to close, they may decide to sell it to someone else. At the very least, you'll be paying a per diem fine for every day past the original closing date you go.
Every transaction is different, but my advice to my client and anyone else considering looking at foreclosures is " expect the unexpected." Be persistent, patient, and flexible--and of course, get yourself a good Realtor.
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