Yes, that beauty you found looks like a great deal, but as your mother once told you, you don't get anything for nothing,and with foreclosed properties, otherwise known as REO's, getting it to close isn't always easy.
My clients happened to fall in love with this home.
It was in pretty good shape for a bank-owned home; the only big issues were a few missing appliances, missing knobs on cabinets, dirty carpet, a broken water heater control, and slightly elevated Radon. THE Bank USUALLY WILL DO LARGE REPAIRS like Radon since most buyers will not make an offer on a property with RADON, and the agents and bank must disclose this to any other potential buyers.
As an Accredited Buyer's Representative, my goal is to always work to get you, the buyer, the best terms and price; however, even after you think you've won a bank owned property contract, things can get messy. We negotiated a $10,000 seller subsidy, which, by the way, the bank agreed to pay. ( Make sure you read the small print in the bank addendum) The addendum mentioned something about not paying prepaid items or escrows. Since most bank addendum are unique to each bank, it is necessary to read each sentence and understand what is being addressed.
We did everything PNC, required. Funds and documents had to be given to the Title Company no later than 12:00 pm 3 days before settlement. My purchasers' lender worked diligently and had the docs emailed to OUR Title Company who then emailed everything to Sam White's Office by 11:23 am on Thursday. Our closing was scheduled to be the following Tuesday at 2:00 pm.
By the way, it is extremely important to have your own Title Company do your closing, not the Bank Owned Title Company. Send me an email and I will be gald to follow-up on any questions you might have regarding this.
THE PROCESSOR FOR THE BANK DID NOT OPEN HER EMAIL UNTIL 1:40 PM THEREFORE CAUSING A DELAY IN OUR CLOSING. THE BANK HAS THE POWER TO DELAY CLOSING, BUT NEVER THE PURCHASER! My clients WOULD HAVE BEEN CHARGED $100+ PER DAY if they delayed closing THIS DELAY COULD HAVE CAUSE MY BUYER TO LOOSE HIS INTEREST RATE LOCK. Fortunately, HE HAD ONE MORE DAY TO GET TO CLOSING WITHOUT BEING PENALIZED.
Wednesday morning, I received word the bank was now reducing the seller subsidy to $8,000. THIS WAS CLEARLY NOT WHAT WAS NEGOTIATED IN OUR CONTRACT. We have the everything approved by the lender and if any changes are made to the HUD, we will need another approval. This could take 1, 2 or more days, not something my buyer can afford to do.
Talk about feeling like your held hostage to the bank!! It as if each bank, the buyer's lender and the REO Bank, PNC, are wanting to see who will back down first. All we want to do is go to settlement on the home.
So we pulled the trigger- WE REFUSED TO CLOSE WITH LESS THAN THE AMOUNT OF SUBSIDY WE HAD IN OUR CONTRACT! Unfortunately, the listing agent reduced her commission $2,000 and made up the difference.
This must stop! Contracts must be dealt with fairly with all negotiated terms revealed. Do the REO properties want to sell the property or not? Who really is holding the cards? I will be warning all my clients of these unfair practices and urging them to look elsewhere, especially with PNC owned properties.
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