| In today's real estate market we are finding more and | | | | presented, you can expect to receive a counter offer |
| more bank owned properties and you may find that | | | | back. The bank needs to negotiate the best price that |
| several homes your real estate agent shows you are | | | | they can, remember, they are getting less than was |
| actually bank owned. What do you need to know | | | | originally owed on the property and they are not in the |
| about buying a bank owned property? Bank owned | | | | business of giving away these properties. They are |
| properties are known in the real estate community as | | | | also constantly audited and need to show that they |
| REO's (Real Estate Owned) which means it did not | | | | attempted to get the best and highest price that they |
| sell in a foreclosure auction as many do not even get | | | | could. This process could take several days for a final |
| a bid on it and the property has now gone back to the | | | | approval so be patient and wait for this process to |
| bank. The bank is owed more than the property is | | | | work itself out. |
| currently worth on the open market otherwise the | | | | Inspections |
| owner probably would have sold it themselves. | | | | Most purchase contracts already have an inspection |
| When buying a bank owned property you need to do | | | | period written in them but pay close attention to the |
| your homework. Have your professional real estate | | | | counter offer and the banks paperwork to clearly |
| agent pull the comparables (what similar properties in | | | | understand the inspection period. Although you have |
| the same area are going for) to be sure that the | | | | already agreed to purchase the property in its "As Is" |
| asking price is really a good or fair deal. Of course, you | | | | condition this does not mean that once in contract you |
| can and will likely negotiate on the price in an official | | | | are solidly bound if something major arises in the |
| written offer. Keep in mind that although you will be | | | | inspection period or for that matter too many little |
| buying the home in "As Is" condition you should still get | | | | items. |
| an inspection to be sure the property does not need | | | | Be sure you have a qualified inspector thoroughly |
| unexpected major repairs, little repairs are normal and | | | | inspect the property including but not limited to the |
| if you are getting a great price it may be worth those | | | | following: |
| small repairs. You will also need to consider a few | | | | · Sound structure of the home |
| other costs like, renovating the cosmetic items such as | | | | · Foundation Condition |
| flooring or fixtures the former owner may have | | | | · Roof Condition |
| removed. Carefully add up all the costs involved | | | | · Electrical |
| before you actually make your offer. | | | | · A/C and Heat Pumps |
| Make an Offer | | | | · Appliances that are in the property |
| Don't make the common mistake that many people do | | | | · Water heaters |
| in thinking that the bank simply wants to dump the | | | | · Plumbing issues |
| property at any price. Every bank will work a little | | | | · Pool surfaces and pumps/cleaners |
| differently but they will all have the same goal in mind. | | | | · Possible past leaks and mold |
| They need and want to get the best price they can | | | | · Termites |
| and usually they have an entire department working on | | | | Again, you need to consider during this inspection |
| their REO properties. | | | | period what the costs are in making any of the above |
| So now you put in an offer, do not get into a bidding | | | | repairs as well as any cost in bringing the condition to a |
| war with others on a property driving the price higher | | | | livable condition including cosmetic repairs and |
| and higher and possibly too high for what it realistically | | | | replacements. |
| should be sold at. Once your offer has been | | | | |