Bank owned homes are typically listed for sale with a real estate agent after foreclosure process is complete, and while you may save quite a bit of money by choosing a bankowned home, it is not without some bumps along the way. Purchasing a bank owned home is not for the faint of heart, here are some tips for getting through the REO process:
Not the typical condition: The condition of bank owned properties are usually needing repairs. Some of which will be required if you plan to get a loan on the property. Past owners may have left angry and left the home in bad condition with foul smells, missing appliances, light fixtures removed, even bathrooms without toilets and sinks.
Be willing to accept the unknown: Regular homeowners fill out a sellers disclosure statement alerting new buyers to certain facts about the home and its condition. A bank owned home is usually exempt from this requirement so you will not have the previous owners history to rely on .
Thoughts before making an offer:The Bank typically will not accept a real low offer the first month of the listing though if it doesn't sell we usually see a price reduction within 30 days. So realize the sales price on the house may not come in much lower than the asking. Some of these properties can be "a dream come true" if you get them at an amazing price, or they could be your worst nightmare. Research the property, go to the city, county or governing agency to check on past or current violations. Hire a professional home inspector to find the large issues, make sure the power & water is on!. Some major repairs may be negotiable, but usually only the ones that might be required by a lender. Remember repairs may be necessary, since this home may have been vacant for months . Keep in mind, when it was occupied the owners could have been under a financial hardship, preventing them from doing regular repairs when needed.
Make a clean offer: The closer to asking price you can offer, the better. Include your earnest money, keep contingencies to a minimum, and suggest a reasonable closing date some banks will pay buyers closing costs while others won't. Each Bank and Servicer is different in the procedures so be ready to figure out the process as we go. The simpler your offer is, the higher chance you have of the bank accepting your offer or countering in a reasonable time period. Remember they are a company that works with guidelines & ratios, not emotions.
In the past year or two we have handled 28 sales sides of Bank Owned properties... give us a call and we are happy to chat about the process and the market!
Comments (2)Subscribe to CommentsComment