An Investor asks - Why all the Different Rules?

An Investor asks - Why all the Different Rules?

In our industry, there are questions asked everyday that could help others!     Currently, I have an investor buyer in Denver that has been testing the waters in all the different places!

 ` Public Trustee sale, then to the attorney's office

 ` Fannie Mae property

 ` Bank owned property

 ` HUD property

This buyer does not have a computer, so her question was over the phone.   Her question was, why all the different rules in all with these properties.

Winning the bid at the Trustee - payment MUST be in cash on the day you were awarded the property.     You must do your research prior to the sale, as the property could have title issues, which are not done prior to the sale.     These sales are not done through a title company, and if not researched, you could have some issues in the long run.

Fannie Mae says if you are the winning offer, the earnest money needs to be 10% of the purchase.    It usually takes 2-3 days for a response.    You may be given the right to change your bid if multiple offers are offered.

HUD properties are entered for the first 10 days as owner occupied, and reviewed only after the 10 days.    The winning bid is posted on the new HUD web site for the area, and make your best FIRST BID, as you will not be given notice there are other bidders.     The best bid for HUD will be accepted.     HUD bids are written on a HUD contract (one page, with addendum) not on a state approved contract.    This is also were ODD bid amounts are helpful!

The bank owned property (not all) required the first 15 days to be owner occupied.     The listing agent said this is done, so hopefully the property does not go back into foreclosure.    An investment property is twice as likely to be let go to foreclosure as compared to a primary residence.      When there are multiple offers, there is a notice sent to all bidders, and you have the option to change your bid (and/or terms), if you so chose.   The response time can vary from a couple hours to a week, depending on the bank holding title.

When you are an investor, you do run into many different scenarios, rules that we, as Realtors, must know how to advise our clients.      The "regular sale" residential property remains steady - write an offer, put a deadline for a response, and you can get it U/C (if all parties agree) within a short time.