If there is one real estate market that is buzzing with activity in the Los Angeles area, it's the bank owned properties. Compared to most neighborhoods, there are still aren't many available n the South Bay cities of Redondo Beach, Hermosa Beach, Rancho Palos Verdes, Palos Verdes Estates and Rolling Hills Estates. So, when a property comes along that is priced 20% under market by the bank, people line up at the door to write offers. Since the media has talked incessantly about how we are in a buyer's market, it takes a bit of an education to understand that the trade off for getting a great buy from a bank is the lack of control about all other aspects of the transaction. Here's how it probably will go:
1. The bank will require the buyer to be pre-approved by someone affiliated with the bank.
2. The bank will choose the related services for the escrow including the escrow company and title company.
3. The property will be sold "as is". In this case it means there is no negotiation for repairs regardless of the condition. The buyer's only option is to withdraw the offer if they are unhappy with any aspect of the inspection.
4. The bank sets a firm timetable for closing and may pull a sale if there are delays caused by the buyer's side.
5. Ironically, there are times the bank has delays in responding to inquiries, but the buyer doesn't get credit for being patient.
6. Since bank owned properties don't have seller disclosures it is imperative the buyers do any and all investigations of the property in the allocated time period.
So, while it's difficult for buyers to feel they are at "the mercy" of the bank's dictates, I always tell them it is ultimately to their benefit to put up with the indignities of being told what to do because they get a great bargain for their efforts.
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