A Few Tips for Buying Foreclosed or Bank Owned (REO) Properties on the Alabama Gulf Coast

By
Real Estate Agent with RE/MAX of Orange Beach

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: 

  1. 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.
  2. Nearly all foreclosures come unfurnished. Many may be stripped of appliances or fixtures. Be sure to figure this into your buying budget.
  3. 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.
  4. 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.
  5. 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.  
  6. 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.
  7. 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.
  8. Some local or smaller banks may not be in the position to price the property competitively enough to sell in this market.  
 
Buying a foreclosed property can be scary, but it can be a tremendous opportunity to get a great buy. Count on me, your expeienced Alabama Gulf Coast realtor, to guide you through.  I have listed and sold bank-owned properties, so you will be in experienced hands as you make your Alabama Gulf Coast purchase!

Comments (3)

Tim Lorenz
TIM LORENZ - Elite Home Sales Team - Mission Viejo, CA
949 874-2247

Foreclosed properties in our area do not necessarily sell as cheep as the short sales.

Sep 05, 2011 06:28 PM
Debbie Laity
Cedaredge Land Company - Cedaredge, CO
Your Real Estate Resource for Delta County, CO

Our foreclosures tend to come on at fair market value, and then prices are dropped about every 30 days. But I did have one asset company that wouldn't drop the price for over 6 months. They are sold as is, so inspection is important, and in most cases, don't expect the bank to do any repairs. This is a good list to go by.

It's a MUST to have financing in place, and don't try to play games with the bank if the property is a good deal. I've seen too many people lose out, by trying to get an even better deal. It usually doesn't happen.

Sep 05, 2011 06:34 PM
Ronald DiLalla
Century 21 Discovery DRE 01813824 - Anaheim, CA
No. Orange Cty Real Estate

Hi Leigh, whatever state you are in and what ever the sale REO, Short sale, etc.  get yourself an experienced AGENT!!!!!!

Sep 05, 2011 06:43 PM