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I never purchased a bank owned house, but one of the disadvantages of them is that they are often in horrible condition and require substantial work.
I have never purchase a bank owed property, but have helped many buyers get financing for REO properties. Its hard to say every purchase is on a case by case basis. Obviously the bank is not in the business of owning real estate so they are looking to sell the homes off fast and you will find deals. Just dont expect to turn around and make a profit in the short term. If you plan on holding the home over the longterm you could make some good money.
Some bank owned houses in my area are so bad they are condemned.
Thanks. I do realize there could be issues with the condition of the home. I'll let the inspection take care of that. I'm more concerned with issues related to clear title. I don't want to get into a situation where I purchase a REO and then down the road get hit with claims/litigation associated with the previous owners of the property. Does anyone have any information on this they could please share?
You can buy title insurance.
In all REOs I've seen, you can't make an offer contingent on an inspection. You can have an inspection after you make an offer but it is for your information only. I would definitely buy title insurance. I think on my last home costing around $150k, the title insurance was $600. Definitely worth it if the homes past is suspect.
Foreclosures are sold "as is" Banks will not make repairs.
alpine, that is not always true... some banks will hire a local agent to handle reconditioning a property, and that may become more common as these properties begin hurting banks more and more...
yep, pretty standard... that and worse...
In Ohio every single one I have seen is offerred "as is" and clearly states the bank will not make any repairs. The bad thing in Ohio is these deals takes months to close. Another agent in our office had a deal accepted by the bank the first week of Oct. They still have no closing date set. I cannot understand why these banks here take so long. You would think it would be in their best interest to close the deal quickly.
I've seen too many disgusting and water damaged bank owned homes here in ohio.. As potential buyers we're no longer looking at REO's, perhaps a pre-foreclosure short sale, but I seriously doubt it with the way the banks are acting.
When its not frustrating its actually fun watching financial panics.
Nothing wrong with REOs just write in a more liberal inspection timeframe. Contrary to popular belief you can request allowances after the inspection.
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They state 'as is', but they will do things necessary to get the loan. They will replace water heaters, etc, otherwise the buyer can't get the loan. The home must be 'habitable' in order for the buyer to get the loan, and the banks are willing to make it so. --But remember, habitable is not very nice, it's only functional.
What is a bit surprising to me is the number of REO inspections I'm doing for buyers who are clearly unaware of what they are getting into (in terms of property condition) prior the the inspection - at least in my area this in not a game for real estate novices.
It seems that folks are generally saying that you can NOT make an offer contingent on inspection... With that being said, do folks typically have an inspection after a viewing (but before making an offer) if they are seriously interested in the REO?
We have investors that either come out to see them w/a builder or an inspector - and don't commit to making an offer until they know what's what.
Having said that, I can also tell you that based on the condition of some of these properties, I've had buyers make offers of half the listing price.
AS IS means 50% off asking... that should cover most problems....
Good luck with the 50% below asking, Nick. And don't think that your lab is going to scare sellers into lowering their prices, since Shadow (the German Shepherd in my profile) will "take care" of things...
I am an agent in California, and 3 of my last transactions were REO's. Here is what I did; 1. we negotiated a price well below the asking price 2. We did a physicall inspection and requested a flat fee amount for repairs. Most banks will not pay for repairs and use the "SOLD AS IS" clause to deny anything. However, I followed up my physicall inspection with free quotes from a proffessional to justified my request. Once we presented them to the other agent, he submitted them and we got 50-75% of the amount we requested. I should point out the whole process took 4 days instead of the standard 10 day physicall inspection period. The other agent helped get the process done because we were expeditious and thorough. In California escrows have a title insurance requirement so that covers any future litigation regarding title. Oh and by the way, REO's are diamonds in the rough, I always say ;-)....happy buying
REO are properties that are almost inhabitable and should be looked at as 50% off asking, or go to hell.
How about an inspection and estimate of repairs ?
Thats why you ask for at most 50% off their asking, go inside and check it out before....you cant lose. Or you can go to hell like Ghennis...lol
REO are properties that are almost inhabitable and should be looked at as 50% off asking, or go to hell.
At first I didn't think you knew what you were talking about. No I'm sure you don't.
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The REO's I've been tracking are in nice neighborhoods and look great from the outside. I know the inside will tell the tale...Assuming the inside is in fairly good shape - does anyone have any suggestions on how much below asking to offer? I'm sure the banks are ready to deal...not sure about 50% off though
... and, it's free and anonymous
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Bank owned properties
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Nightowl1
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Hello all,
For those that have experience purchasing a bank owned property... What are the advantages/disadvantages of doing so?
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