Originally Posted At www.bigbearilluminated.com
Buying a bank owned home is an interesting process. Sometimes it is swift and painless. Other times, it is an incredible quagmire. No bank operates in the same manner. Every single one will have different requirements and procedures that dictate how they do business. If you are considering a purchase of a bank owned property, make sure you are dealing with an agent who has experience in these matters. Otherwise you could be in for some unpleasant surprises.
One thing many banks have been doing is forcing the buyer to prequalify with a lender of their choice. This means that even though you are preapproved with the lender of your choice, they make you go through the whole process again with their approved lender. It is almost a kind of scam because the bank approved lender makes a concerted effort to get the buyer to get the loan through them. They can be really pushy about it and make you feel uncomfortable. If you have a lender you already trust and want to use, don't feel bad about telling the banks lender you aren't interested.
Another thing I have encountered lately is the bank asking the buyer to provide proof of funds for the down payment. They might even require proof of funds for the deposit. Just be aware that they might do this and have everything in order. Many times there is mass confusion going on and nobody at the bank knows what is going on. Sometimes they don't remember one day to the next what they told you. Patience is of the utmost importance.
A few weeks ago, I had a bank offer to sell my buyers a house for $185,000. A week later we decided to accept the offer. The bank didn't recall offering us the house for that price and refused to sell it for less than $189,000. My buyers moved on and found a better house. The house in question is still on the market and reduced to what we offered. It makes no sense,and that is the point I am making. Don't expect anything to go smoothly. Expect chaos and be happy if order is the rule.
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