What is a Bank-Owned Home?
Once a bank or lender has fully foreclosed on a property (Foreclosure Timeline) it becomes bank-owned. Most bank-owned properties are listed with real estate agents. Once the property is listed – it is commonly referred to as a REO or (“Real Estate Owned”).
Are you thinking about buying a bank owned home?
If so, are you considering a bank-owned home because you want a “good deal?” If you are like most people then your answer is probably yes – I am looking for a good deal! Clearly, good deals are available in the bank-owned market. Buying a bank-owned home may not be as easy as one might think and certainly is not without risk. Buying a bank-owned home will require a lot of research, persistence and patience. Buying a bank-owned home also requires a lot of preparation.
If you are considering taking advantage of the many unique REO buying opportunities available today, then you definitely want to consider the following:
1. Choose a Realtor who knows the REO business. Choosing to work with a certified REO specialist will undoubtedly help you win in the negotiation process. Banks and lenders have their own unique and specific requirements for offer presentation. If you are working with an agent who does not know or understand the REO process, your offer may never been seen by the bank. That is a fact. Many banks will not even look at offers that are incomplete.
2. Sit down with a qualified lender and get pre-approved. Most banks require prospective buyers to get pre-approved with the bank who owns the property. Although buyers are not required to use the bank to close on the transaction the bank wants to know upfront that the buyer making the offer is qualified to close.
3. Most bank-owned homes are sold “as is” and inspections will be at the buyer’s expense. Caveat Emptor ~ Buyer Beware!
4. An offer to purchase a bank-owned home must accompany specified forms and other special documents required by the bank. If you are working with an REO Specialist you won’t need to be concerned about these forms and documents because your agent already knows what the bank requires.
5. Making a low-ball offer on a bank-owned home may cause the bank to ignore the offer. Because most REO properties are priced to sell, and banks are back-logged with property they want to release from their inventory, banks typically do not respond to low-ball offers on REO properties.
6. Keep in mind, the lender is behind the wheel in bank-owned transaction. Lenders have their own rules, processes, and guidelines. The lender is required to answer to anyone, except the bank.
7. Consult with a Realtor and REO Specialist and decide if buying a bank-owned property is right for you. Many people consider buying a bank-owned home because they believe it is a better deal. It may or may not be a better deal and it may or may not be the best opportunity for you. Many buyers have learned that in looking for a bank-owned home they have found a traditional listing that proved to be an equal or better value … a value they realized without the additional risk or added costs of obtaining inspections.
Kathleen Daniels – Certified REO Specialist
Copyright © 2008, All Rights Reserved by Kathleen Daniels *Bank-Owned Homes*Tags: Bank Owned, bank owned home, bank owned homes, REO, REO properties, REO Specialist