DREAMING OF GETTING A GREAT BEACH BARGAIN ON A BANK OWNED PROPERTY? READ ON!
AFTER A THINNING INVENTORY THIS SUMMER in Gulf Shores and Orange Beach, Alabama, along the beautiful Gulf Coast, it appears that we will have more foreclosures coming. Here are a few tips if you are thinking of buying a foreclosure or bank owned property. Some things you need to know about buying a foreclosure:
- REDEMPTION - Alabama has a 1 year right of redemption law. As your realtor, I can explain in detail and it is not as scary as it sounds. We can do the research to find out when the redemption period began. I can also refer you to an experienced foreclosure attorney. This right is almost never exercised.
- Nearly all foreclosures come unfurnished. Many may be stripped of appliances or fixtures. Be sure to figure this into your buying budget.
- REO and bank owned properties vary widely in condition from poor to excellent, but are usually sold in as-is condition, making a home inspection essential in the due diligence process. I can help you find a good inspector who works Gulf Shores and Orange Beach.
- Terms of sale vary based on the bank selling the property and/or any third party asset management companies assisting the bank in the sale. EXPECT MORE LENGTHY AND REPETITIVE PAPERWORK THAN YOU WOULD EXPECT FOR A TRADITIONAL SALE.
- Some foreclosures (Fannie Mae, for example, with their First Look Program) require a 7-14 day waiting period for investor offers, giving the advantage for purchase to owner occupant purchasers.
- Generally, banks and their asset managers price the property to sell quickly. Be ready to make an offer. Have your cash ready or your financing in order. Often, a property will receive multiple offers and sell quickly. Plan on providing proof of funds or financing approval with your offer.
- Banks have no emotional ties to the property and operate based on numbers. They tend to not accept or counter any offers less than 6-10% off from asking and will play the list and reduce game if not sold in 60-90 days or less. They will periodically reduce the price until the property sells.
- Some local or smaller banks may not be in the position to price the property competitively enough to sell in this market.