The Bank Owned Properties are called REO.
Dealing with these reo properties can be somewhat frustrating and time consuming. That being said, sometimes the wait can be worth it, if you are not in a rush.
Once a house is "foreclosed" and owned by the lender then they will normally assign the property to an asset manager who will then list the property with a local Realtor. It will appear on the Realtor MLS system for all to bid on. Some properties in bad condition may restrict buyers to ALL CASH. Some properties will restrict buyers to owner-occupants only for the first week to two weeks.
Before a property is "foreclosed" it will be offered at auction to the highest cash bidder at the county courthouse (probably online auction). Most properties have a first mortgage higher than the property is worth so unless the lender allows it to sell below the judgment amount it will go back to the lender and then get listed for sale by a Realtor.
If you cannot pay ALL CASH you will be at a severe disadvantage for most REO properties. If you are buying to occupy as your primary residence you may want to focus on http://www.HomePath.com http://www.HomeSteps.com and http://www.HudHomestore.com listings because investors cannot bid against you for the first week or two or even a month (HUD).
You absolutely need to find a Realtor to help because the best deals will go fast.
All the best,
Think about it, who knows better than a Mortgage Broker?
Step 1: PRE-APPROVAL LETTER
â€¦â€Oh, I have a 1200 credit score, I wonâ€™t have a problem getting a loanâ€â€¦.â€Iâ€™ve bought 23 properties and never had a problem getting a loan in the past (YEAH RIGHT, MAYBE PRIOR TO 2006)â€¦ â€Iâ€™m self-employed and I made over $300,000 last yearâ€â€¦â€Oh, donâ€™t worry, I was approved ONLINE last year with B of Aâ€
When any Realtor or Mortgage Broker hears all this from buyers/Borrowers hereâ€™s what theyâ€™re thinking: http://www.youtube.com/watch?v=37OWL7AzvHo
Experience Realtors (Buyerâ€™s Agents and Listing Agents) have heard all this (what comes out of the south end of a north bound bull) a million times from buyers who untimely couldnâ€™t close because they couldnâ€™t get a loan in 2012 and 2013! So invest the 15 to 30 minutes it takes to fill out a Loan Application and obtain a LEGIT pre-approval letter. The Mortgage Loan is not some trivial formality these days, without the loan, YOU DONâ€™T CLOSEâ€¦.PERIOD!!!
Step 2: ESCROW LETTER
Enough with the ridiculously weak $1000 deposit written on an offer contract and sent to the seller thing! Fact is, $1000 is a JOKE these days! Heck, why not just write $100.00? If you want your offer to stand out from all the rest, deposit at least $5,000 or 5% of the offer price in a Title Companyâ€™s Escrow account and have them give you an Escrow Letter
â€¦â€¦â€¦â€¦â€¦.ARE YOU WITH ME SO FAR? GOOD.
Now, you have your Legit Pre-Approval Letter, your Escrow Letter and ready to enter this 2013 Florida real estate market/Combat Zone!
But unlike 90% of your competition who are entering the battle on a Three Legged Donkey, Swinging a Butter Knife with a Bag of Rocks, youâ€™re riding into the battle in an Abrams Tank with night vision and Laser guided Armor piercing rounds to fire down range! You are the next best thing to a Cash Buyer!
Now you are ready to weed thru what seems to be a million realtors to find the best one for you. NOBODY KNOWS REALTORS BETTER THAN A MORTGAGE BROKER! As a Mortgage Broker who has been doing loans all over the state of Florida since the 90s, I know realtors better than most and I know a lot of them too!
Contact me and Iâ€™ll get you Pre Approved and put you in touch with a realtor who I know will help you locate and negotiate your best deal on a home.
Pro Option Mortgage/ Florida
Ph: 888 662 4404
Prior Service U.S. Marine Corps
Buying a Bank Owned property can be quite different than purchasing from a standard Seller. In addition every Bank or Institution offers different terms, conditions, they follow different marketing strategies and even those can be different for any given property.
Bank owned properties are typically sold as-is, where is, with all faults, no warranties of any kind as to the condition or functionality of the property are made by the Seller.
Bank owned properties require in addition to the standard as-is sale contract, special addenda drafted by the Institution. These additional terms are usually not subject to counter.
From showing, to offers, to inspections period, to closing a Buyer will find a lot less flexibility when buying a foreclosed home.
On a foreclosed home, the bank is the seller and the bank typically dictates the process. So it depends on the bank, really.
However, the process is typically not too different from a conventional sale. Only things may take a little longer since there is no seller, but a bank officer and their attorneys working on the case and it might not be the only file on their desk.
Also, keep in mind, that foreclosed properties can be in "not so good" shape, due to a previous owner that trashed the place - or simply due to the fact that the property was uninhabited for quite a while. (It takes time for the banks to process a foreclosure before it comes on the market!) This can be a problem in South Florida with it's high level of humidity. So make sure to inspect the home thoroughly and check if there are any liens on the property, too.
If you are putting an offer on a foreclosed home, make sure to put your "highest and best" right away. It is very likely, that the bank will get multiple offers and they won't get back to each and every potential buyer to negotiate back and forth.
Banks (and the Realtors who work for them) are well aware of the current market situation, so do not expect a bargain. If it looks like a bargain, its very likely that it needs a lot of work or there are liens that must be paid off on top of the sales price.
It's a good idea to work with an experienced local Realtor who can guide you through the process step by step!
I hope that helps and I wish you the best of luck!
Coldwell Banker Residential Real Estate
I will be happy to assist you please contact me at your convenience.
A) what is the condition of the home?
B) Are there any outstanding liens?
2) Review the comparables and determine a fair price for the home. Remember, you need to buy a foreclosure at a significant discount to justify the additional risks.
3) Identify and secure your funding
4) Put in an offer.