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John, Home Buyer in Maryland

Purchasing Bank Owned Property

Asked by John, Maryland Thu Apr 10, 2008

When you buy a bank owned home, are you able to walk through and inspect the home just as if you were purchasing a home from a ordinary seller? Not sure if I'm confusing buying a foreclosed bank owned home vs. buying a foreclosed home at an auction. Thanks!

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9
John,

Always remember, everything is negotiable in real estate! Although the banks aren't always the easiest to negotiate with, they too understand that buyers have the right to perform "due diligence." In most cases, while the home is to be sold "as is," the bank will still give you a 5-10 day period to conduct any inspections on the home and make sure that you want to move forward. Whether or not they'll be willing to make repairs on any defects is the question . . . But, yes, you are able to walk around and inspect the property. If this isn't already written into your contract, make sure you negotiate it in, or hire a trusted Realtor to do so. ;) Hope this helps.

Deeana, your Realtor for life!
1 vote Thank Flag Link Thu Apr 10, 2008
Almost FIVE YEARS OLD!!!!!!!!!
0 votes Thank Flag Link Mon Jan 7, 2013
In Utah, in a short sale situation, there is a final inspection giving the potential buyer a way out if he or she finds issues that they are not comfortable with.

It is my understanding that an REO, or Bank Owned home purchased at an auction does not offer any final inspection. It is the responsibility of the auction home bidder to do their due diligence prior to the auction. This can be difficult if the home is occupied.
0 votes Thank Flag Link Mon Jan 7, 2013
You can hire your own inspector for the home, but you can rest assure that when the bank says the home is sold "as is" they do not and will not do any repairs to the home or fix issues found by the inspector. Just be prepared for that. You can find some really awesome deals on bank owned homes, but you could be getting problems in the long run if the home has been sitting for an extended period of time or a resale. Good luck!
0 votes Thank Flag Link Fri Jan 29, 2010
If you are buying a bank owned home you can usually do all of the inspections and have the power and water turned on when those inspections are done. You will usually not get sellers property disclosures and you will have to sign an as is addendum. Don't be afraid of a bank owned home because you will still have time to do your due diligence. If you buy a home at the courthouse auction you are usually buying it with no disclosures and not time to do any inspections. You may be able to do some inspections if you contact the bank and work something out with them before is goes to auction. Most of the homes going to auction will be protected by the first lien holder, through the bid process or the bank may set a minimum bid amount. You may be well advised to buy the home after it comes back on the market as an REO.
0 votes Thank Flag Link Tue Apr 22, 2008
Hello John,

Foreclosures are sometimes challenging, but they are getting easier to work with. I will say that Joshua hit it right - there are a lot of variations on foreclosures, and the chances are you wouldn't be able to buy one on the courthouse steps, anyway. The banks are always there to obtain their properties back.

A foreclosure that's listed with an agent is a bank-owned property. Dealing with these banks is a bit like dealing with the government. They have certain ways of doing things and you have to follow their way. Most will give you the chance to do an inspection, even if they won't fix anything. You just have to make sure you're quick about it. And most importantly, because you give the listing agent a cashier's check for earnest money, you have to make sure you follow the instructions, because it makes it real easy to lose your money.

I have done quite a few foreclosures lately, and everybody's different. I notice you posted this a while back, and if you're still looking around, feel free to call me, I'd be happy to run you through the steps and show you homes. Call me at 678-362-3138.
0 votes Thank Flag Link Tue Apr 22, 2008
John,

Most people make this same mistake. REO, Foreclosed, Bank Owned, Corp. Owned, HUD and Fannie May can be grouped in the FORECLOSED bracket. As in foreclosed and bought back by the bank.
In all of these cases you will most likely have time to inspect (but you might not be able to ask for repairs).

Buying a true foreclosure does take place at the court house steps, and in most of those cases you cannot inspect the home.
0 votes Thank Flag Link Fri Apr 11, 2008
Joshua Jarvis, Real Estate Pro in Duluth, GA
MVP'08
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If the bank does own the home already then you should be able to view the home and if interested can usually buy subject to a satisfactory inspection. If you are buying at a foreclosure auction it is sometimes difficult to inspect prior to bidding, but I suggest that you always try to get inside home to inspect before bidding. i have even paid $20 to exisiting owners just to get inside house prior to auction and it was well worth it.
0 votes Thank Flag Link Fri Apr 11, 2008
As you might guess, I am seeing more and more Home Inspections on foreclosed properties. An auction would probably be more difficult, but a bank owned property should allow for a home inspection. It is probably best to consult with a home inspector that has experience with these type properties in your area. In the Chicago area, many homes are winterized and have the utilities shut off. This needs to be taken into account by the home inspector.
Web Reference: http://www.inspexpro.com/
0 votes Thank Flag Link Fri Apr 11, 2008
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