| An old friend of mine emailed me this morning from the | | | | other offers to come in). Make sure you know if there |
| other side of the country and told me that he would | | | | are multiple offers! (the listing agent won't tell you how |
| like to start exploring investing in bank owned homes | | | | much the offers are for, but they will typically tell you if |
| and asked me for some advice. Here is what I wrote | | | | they have other offers so you can adjust yours |
| back to him. | | | | accordingly) In my experience, banks usually will not |
| Most, if not all bank owned properties are listed with | | | | entertain offers below 7% of asking price. Typically, if |
| real estate agents. (in Las Vegas anyway) My advice | | | | a property does not sell for 30 days or so, then they |
| would be to find a good buyers agent with reo | | | | will probably start dropping the price by about 5-7% |
| experience. (The offers are quite different than regular | | | | per month until they get action on it. However, there |
| sales). Out here, many repos are in great shape and | | | | are always exceptions to the rule. |
| move in ready. The banks are almost giving these | | | | When you make an offer on a bank owned home, |
| away! They have way too much inventory and are | | | | you are normally still entitled to a home inspection by a |
| not making money on sitting homes, so they usually | | | | qualified home inspector. (should be standard verbage |
| discount them until they sell. This is one of the reasons | | | | in your real estate agreement, if not, make sure to add |
| that many people find themselves upside down on | | | | it in) If you find major problems, in most cases you can |
| their mortgage. The banks are selling comparable | | | | rescind the transaction. Make sure to read the bank's |
| homes for much less than an average person could | | | | counter offer! (you will always get a counter offer |
| afford to sell for. Find a good lender and get | | | | from a bank even though they may accept your |
| pre-qualified. Make sure you get a copy of your credit | | | | original terms, they will counter you with numerous |
| report as you will also probably have to qualify with | | | | company disclosures). Keep in mind that the bank |
| the lender that actually owns the home that you are | | | | wants to fix NOTHING. Make sure your offer reflects |
| making an offer on as well. You will be allowed to use | | | | this. As is where is. this simply means that you are not |
| whatever lender you wish, but in most cases you will | | | | expecting them to make any repairs. They typically |
| still have to qualify with the lender who owns the | | | | won't accept an offer with pre-conditioned repairs. |
| property. | | | | (Well, I have never seen them do it) Also, very |
| This is because the bank wants to make sure that | | | | important. If the property is in a home owners |
| you are truly qualified, and they will try to earn your | | | | association, make sure that the bank is going to pay all |
| business as well. You can use this to your advantage | | | | of the back dues and fines on the property(these are |
| when shopping for rates, closing costs etc: You don't | | | | usually evident on bank repo homes) as well as the |
| want your credit ran every time you want to make an | | | | back taxes owed. This is normally not an issue as the |
| offer so it is important to get a copy of your credit | | | | title company shouldn't issue title insurance without |
| report from the first lender and simply provide it to any | | | | these bills being paid. Also, make sure that the utilities |
| other lender that may need it. (your FICO score takes | | | | aren't going to hit you for back fees. This is starting to |
| a hit every time your credit is ran) Keep in mind that | | | | pop up out here. I have heard of utility companies |
| most reo's (out here anyway) sell for very close to list | | | | refusing service to addresses with past due balances |
| price or many times above. Many lenders will price | | | | no matter who's name it was in or going to be in. Just |
| their homes well below market value and let them get | | | | a couple of safe guards. Hope this helps and I am |
| bid up. (The listing agent will disclose that it takes three | | | | always happy top answer your questions. |
| to five days to get a response... allowing more time for | | | | Good luck! |