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Inspect before you offer, the LE will likely do no repairs at all. I always buy an additional copy of title insurance one for the bank, if financed, one for you. It's expensive but VERY important on a property that has been in financial distress. I have had two properties that it has saved me on. The most major was a REO that had a 2nd mtg that was not disclosed nor discovered until after I purchased it. The TI had to pay it off. Had I not bought the second copy for myself, I would have have had to pay it off to turn it, then try to get blood from a turnip bankrupt seller. The second was a house that had a judgement placed on it that was not found when I purchased it.
Be very careful when buying property that has been in financial distress as often times they have been in the hands of.
If it's as discounted as you say, make your offer a serious one. INSPECT INSPECT INSPECT!
Good Luck!!! and buy the extra copy of TI
Could you explain in detail about "additional copy of title insurance one for the bank, if financed, one for you."
Thanks very much
I would offer a really dirty cheap price first. other than regret later giving a high offer.
search zillow, you will surprise how low some houses has been sold out
see the wilki explaniation owner vs. lender
http://en.wikipedia.org/wiki/Title_insurance
Lender demands you buy a them a policy, pay extra and get you a copy at the same time
The internet is great.
Aldreth, I have been on here for all of two days. What in your resume should make us want to follow your advise?
Nope, but your lack of an answer did.
"How to offer? Just take out a knife and slam it in your eye."
That was blunt.
So no price, however low makes sense?
Try 2003 market value...and throw in $75,000 of upgrades for FREE. And it sits on 1 acre of land in a desireable neighborhood.
I'm not trying to sell it to you...but there are some situations that can be ideal in not so ideal times.
Hi Musicrox,
My suggestions is for you to use your common sense. If you feel strongly that the property is already at the lowest price possible that there is , then i would advise not to go lower than the asking price. Also you could be running the risk of having another more attractive offer on the table and the Bank just ignores yours. Keep in mind that Banks are not in the business of keeping real estate and are currently overwhelmed with properties/offers and counter offers so anything you can do to minimize the time i would suggest you do so. Good luck on your offer!
Leonardo.
I suspect there aren't any other offers or lookers...unless my buyer's agent is soliciting it. He just found out about it through ME a few days ago. It's not even listed in the MLS with a proper zip code....only people who might run across it are from far away or happen to drive by. It's an eyesore from the street.
I should mention it's listing price has taken significant cuts every two weeks on average in the last few months.
[content removed by moderator for being a personal insult]
As for the title insurance. The bank requires a policy sufficient to cover the mortgage amount, call a lenders policy. You would be well advised to obtain an owner's policy in conjunction with the lenders. The owner's policy is for the amount of your purchase price. One last word of advice; get an escalation clause. This provides for an increase in the property's value.
What is the general cost for title insurance? At what point, if ever, would it be safe to cancel the owner's policy? How long, in general, does it take for the house to come clean so to speak?
When the property becomes bank-owned/REO, doesn't the lender clean up all the taxes and possible liens?
Thanks for the advise.
Once you buy the policy, it's paid for. I have never paid over $800 for my policy. Yes, the lawyers are supposed to do their jobs, and the banks are supposed to do theirs. But don't trust them. Like I said, it has saved me from having to pay off someone elses second mtg and judgements on properties I have purchased that have been financially distressed.
The cost of a policy varies from state to state, and you can ask the closing attorney, or escrow agent, to reduce the cost. It usually costs $3.50/1000 for the lender's and the owner's policy. 2.50/1000 for the lender coverage only. As GP2 stated, you pay only once for full owners coverage. You will need to establish a new lenders policy if you refinance the mortgage. Yes the bank will transfer title to you free of all liens and encombrances.
"I suspect there aren't any other offers or lookers...unless my buyer's agent is soliciting it....
80's,
Be careful in bringing an REO or other property that is a possible steal to the attention of a buyers agent. I am fairly certain that the REA working as my buyers agent stole a house out from under me after I brought the property to their attention. I cannot prove it, but the timing of the whole thing was really fishy. I will probably be going directly to the listing agent if I look at any other REO's.
Thanks everyone for all your helpful advice based on knowledge and personal experience.
Patientbuyer...I had a lightbulb moment when the agent met with us at the house (took a few days for him to get the lock-box code) and he told me that he showed anothe client of his the house earlier in the day. We couldn't get over there until about 5 pm. He told us that his other clients weren't interested. But it got me thinking...dang, he got news of this and he's already workin' it. Made me feel like it wasn't my "find" anymore......but honestly, I think most people will look at like yeah, it's a great deal but....the house has an ugly factor about it. A complete exterior paint job and some architectural design are in order. The lot needs some serious attention. There are a few things that need repair and replacement...all this will require extra cash which we have. But not everyone has.
http://www.zillow.com/HomeDetails.htm?zprop=51716664
see recent sall of this house, only 174K, while surrending houses sold for 300K, what could be the cause for such low price?
Sue, at a quick glance it looks expensive compared to others
How this home stacks up
This home $ per sq ft: $241
Comps avg $ per sq ft: $228
right!
Thanks George, your instruction is very helpful!
Question missed with regard to making offer:
Ask for bank to cover closing costs? How feasible is that when they're taking a big loss anyway?
80smusicrox,
It is a negiotation between you and the bank, but if the costs is right for you and the bank, they can, and have been covering closing costs quite a bit on these transactions.
Lender rating
It's very simple... The banks have a very specfific dollar amount they need to "get back" from the sale of any of their REO properties. The bank will accept an offer that has the highest NET dollar amount....
i.e.... $150k w/ no seller concessions, straight up.
vs.
$155k w/ 3% contribution towards closing costs....
Remember.... these properties are owned by banks.... they're all about numbers, numbers, numbers.... that's it.
I did an offer last week, and bank came back saying, they received couple of offer, and they give each party a counter offer like this:
Is this your maximum amount to offer?
and they dont give any number in details.
What should I deal with this?
... and, it's free and anonymous
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Making offer on Short Sale and REO
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Okay, so you find a deal. Great property, great price. Seller is beyond motivated...bank wants to dump it. Buyer's market. Listing price keeps dropping...and it's finally dropped to an unheard of low price for the size and location.
How to offer? Of course, with an inspection contingency (god knows what could be really wrong with the place) but, should you offer even a little lower than the already relatively dirt cheap price? Maybe it would be dropping it's list price again anyway. Is this even a time to negotiate an already seemingly good deal? Ask for bank to cover closing costs? How feasible is that when they're taking a big loss anyway?
What would you do?
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