How to get the bank-owned home contract right the first time!

By
Real Estate Agent with Metro West Realty 248313

These days, I mostly make my living by listing and selling bank-owned properties.  There is no listing that can ever compete with the bank-owned listing in terms of work put in by the listing agent.  Once we reveive a listing letter, we are required to visit the property within 24 hours to determine occupancy.  If the property is occupied, we become responsible for making the property become vacant as quickly as possible, hopefully by negotiating a relocation assistance package.

Once the house is vacant, the real work begins!  We now do multiple BPOs (full scale ones, not the 1 page kind), make at least one trip per week to the property to inspect, and do dozens of other tasks such as rekey, arrange services, winterize, and coordinate repairs.

Once we finally get the listing, we are sometimes 2 months or more into the property!  And now the real fun begins.  When an offer is accepted by the bank, the dreaded addendums arrive.  These, along with a new GAR purchase and sale agreement, lead based paint forms, proof of funds, and proof of earnest money deposit must be returned to the bank on its timeline, or the listing agent is in trouble!  (Sometimes we are given as little as 24 hours to complete this process, even if it's a weekend) Keep in mind, we have almost no control on the selling agent doing these tasks in a timely fashion.

The key to getting this done properly is to read the directions sent over by the listing agent and make sure you do absolutely EVERYTHING listed!  If even one blank isn't filled out, the bank's quality control will kick the package back for corrections, which slows the process down considerably and may open the door for your client to lose the house if another, better offer comes in while you are fixing the mistakes.  These forms are often lengthy and copmlicated, and I can't stress enough how important it is to read them competely and make sure all addendums mirror the sales contract precisely and all signatures and initials are in place prior to returning them.  This will make for a smoother transaction for ALL involved!

JUST A FEW TIPS:

  1. If you are returning these by scan: Shrink the file size down to something reasonable to email.  File sizes of 12 MB don't email well and certainly don't upload into management software probrams well.  File sizes of 4 MB and under work best and still have good quality.
  2. Make sure there are no blanks left anywhere.  If it doesn't apply, put N/A or 0 there.
  3. Make sure your client initials where needed.  These are often hidden in the middle of the page and are easy to miss.
  4. Call the lender to verify the proof of funds letter.  I once received one, and when I called the lender, he had never heard of the buyer.  The letter was forged!
  5. When in doubt, ask!  It's much better so send an email or make a quick phone call to avoid a mistake than to forge ahead blindly and have to redo a lot of hard work!

I hope to work with you soon and hope this information can make selling your next bank-owned property a little less intimidating!

Posted by

Lauren Yates, GRI   President, West Metro Board of Realtors

Comments (3)

Paul Lesieur
203kloanmn - North Oaks, MN

Good post, I am always reminded that time is of the essence when working with banks, unfortunately they don't return the favor.

Nov 13, 2010 09:39 AM
Dwayne Hicks
Metro West Realty - Carrollton, GA
Metro West Realty

Good Post Lauren - I like having lists and this one helped in dealing with bank-owned properties.

dh

Nov 14, 2010 12:26 PM
Phil Leng
Retired - Kirkland, WA
Phil Leng - Retired

Hi Lauren,

Congratulations on listing bank owned homes. It is a very particular segment of the market.

Thanks for the post. You included a lot of useful information there.

Thanks

PHil

Feb 11, 2011 06:04 PM